Orpic wraps up plastics plant contracts

Oman Oil Refineries and Petroleum Industries Company (Orpic) has finalised terms for the four major packages that make up its new Liwa Plastics Industrial Complex.

The four engineering, procurement and construction projects are worth a combined US$4.5 billion. The first package, for a steam cracker and associated utilities, has been awarded to a joint venture between the US-based engineer Chicago Bridge & Iron Company (CB&I) and its Taiwanese partner, CTCI Corporation.

The second, for the construction of plastics units, has been assigned to Italy’s Tecnimont. The third, for a natural gas liquids extraction facility, has been granted to a joint venture between South Korea’s GS Enginering & Construction and Japan’s Mitsui, while the final package for a natural gas liquids pipeline has gone to India’s Punj Lloyd.

Orpic has said that contracts for the four packages will be signed once it concludes talks over the project’s financing.

The company’s chief executive, Musab Al Mahruqi, said that contracts should be signed and funding completed by the end of the year.

“The Liwa Plastics Industries Complex Project is not only a nationally-significant industrial project, it will be the largest project in the downstream oil and gas industry in Oman,” he said.

“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,” Mr Al Mahruqi said.

Construction of the plant is expected to take four years, with commissioning expected in 2019. Its feedstock will be provided by the Sohar refinery, which is itself undergoing a $6bn expansion.

Orpic has said the project will make it an internationally recognised player in the international petrochemicals market, and will allow for it to use natural gas to produce polythene for the first time in the Sultanate.

This would support the creation of a plastics and packaging hub within the 4,500 square kilometre free zone, which has already attracted more than $20bn of investment.

CB&I said that the contract won by its joint venture will be worth about $2.8bn and will involve it building a plant with modern ethylene technology. The company’s president and chief executive, Philip Asherman, said: “CB&I is pleased to have been selected for this significant project following the successful completion of the front end engineering and design of the project.”

Speaking at the Gulf Petrochemicals and Chemicals Association’s 10th annual forum event last week, the UAE’s Minister of Energy Suhail Al Mazrouei said in a keynote speech that the GCC’s petrochemicals producers needed to invest to ensure that it retained its competitive advantage. Producers from the Arabian Gulf had an 8.5 per cent share of the global petchems market last year, generating more than 136 million tonnes of product.

“Having successfully built up scale and share of the global market over the last 50 years, we have now reached a very interesting inflection point,” said Mr Al Mazrouei. “Global macroeconomic realities mean that the industry must push ahead with its investments to innovate and move even further up the value chain,” he said.

“Leadership in petrochemicals is a crucial area for the GCC, serving as a catalyst for economic diversification and innovation, and making people’s lives better all over the world.”


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Michael Fahy

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