State-owned Oman Oil Refineries and Petroleum Industries Company (Orpic) has finalised negotiations with four preferred bidders for $4.5 billion worth of contracts to build a major plastic manufacturing unit called Liwa Plastic Industries Complex in Sohar.
The four engineering, procurement and contracting packages (EPC) will be completed in four years, with plant commissioning expected in 2019, a company statement said on Thursday.
Among the four packages, a joint venture of Chicago Bridge & Iron Co of the United States and Taiwan's CTCI will be awarded the contract for a steam cracker and utilities. Chicago Bridge & Iron on November 23 said that contract would be worth about $2.8 billion.
Italy's Tecnimont will win a contract for plastics units, a consortium of South Korea's GS Engineering and Construction and Japan's Mitsui & Co a contract for natural gas liquids extraction facilities, and India's Punj Lloyd a contract for building a pipeline between Fahud and Sohar, the Orpic statement added.
Musab Al Mahruqi, chief executive officer of Orpic, anticipates signing of the EPC contracts and financing agreements by the end of the year.
“The Liwa Plastics Industries Complex Project is not only a nationally significant industrial project, (but also) it will be the largest project in the downstream oil and gas industry in Oman.”
“We are concluding discussions with export credit agencies, commercial banks and other relevant authorities and we expect to finalise the project funding plan by the end of the year enabling us to award the respective EPC contracts,” Al Mahruqi added.
With the global market for plastics increasing, the Liwa Plastics Industries Complex will firmly position Orpicand Oman as a recognised player in the international petrochemicals marketplace – enabling Oman, for the first time, to produce polyethylene, the form of plastic that rates highest in terms of global demand and increased the current production of polypropylene.
Liwa Plastics Industries Complex, once commissioned in 2019, will transform Orpic’s product mix and business model, double company profit, create new business opportunities, generate significant employment opportunities and support the development of a downstream plastics industry in Oman.
Following commissioning, plastics production is forecast to have increased by more than 1 million tonnes, giving Orpic a total of 1.4 million tonnes of polyethylene and polypropylene production.
With the highly integrated complex in Sohar consisting of Orpic’s refineries, aromatics plant, polypropylene plant, steam cracker and the downstream polypropylene and polyethylene units, the operation will be considered as one of the finest integrated refinery and petrochemical facility combinations in the world, and will achieve the maximum value-added for Oman’s hydrocarbon resources.
