Energy & Mining
Oman-Kuwait Oil Refinery
By TBY | Oman | Mar 29, 2018
Duqm Refinery, established to diversify Oman and Kuwait's revenue sources and located in Oman's leading Duqm Special Economic Zone, could have an expansive economic impact on the Sultanate.
In April 2017, Oman Oil Company and Kuwait Petroleum International signed a USD7 billion agreement to build a refinery at the Duqm Special Economic Zone (SEZ). The project, for which 900ha of land has been allocated, will be the cornerstone of this industrial center.
The Duqm Refinery is a key piece of the move downstream and to further added value. Duqm Refinery and Petrochemical Industries Company, a 50-50 JV between Oman Oil Company and Kuwait Petroleum International, was established for the incorporation of the Duqm Refinery. The two companies will provide up to 35% of the investment capital, while the remaining amount will be raised through local and international banks. The project itself will have a clear competitive advantage over regional port cities due to its strategically positioned location amidst international shipping lanes in both the Indian Ocean and Arabian Sea. This geographical pinpoint will ease the process of transporting cargo in and out of the region.
According to Hilal Al-Kharusi, CEO of Oman Oil Company, once finalized in 2019, the project is expected to deliver 230,000bpd, while diesel, jet fuel naphta, and LPG will be the primary products. Furthermore, the refinery is expected to include units for hydrocracking, hydrotreating, delayed coking, sulfur recovery, hydrogen generation, and Merox treating. The main goal of the project will be to produce transportation fuels and petrochemicals to meet rising demand in Oman and other international markets.
Duqm SEZ, with 2,000sqkm of land and 70km of coastline, contains sub-zones, including the sea port, industrial area, new town, fishing harbor, tourist zone, logistics center, and education and training zone. The highly integrated regional hub combines maritime transportation and other logistics services with export processing industries in petrochemical-based products, mineral resources, and fisheries, making it an ideal location for the Duqm Refinery and Petrochemical Industries Company.
Duqm Refinery’s management is looking for the asset to make a signifant impact on Oman’s economy and broader society. Recent initiatives include training and development programs and SME support initiatives. Together with the IT Authority (ITA), Duqm Refinery representatives trained and graduated 200 women through an IT training program in Al Wusta Governorate to support the strategic objectives of digitalization of services via e-Oman and e-government initiatives.