Oman Oil Company and Kuwait Petroleum agree $4.6bn project financing for Duqm refinery
Duqm Refinery Project comprises development, construction and operation of refinery, on-site utilities, infrastructure and storage
Oman Oil Company and Kuwait Petroleum International, two leading regional energy groups, have announced the signing of a $4.61 billion multi-source project financing deal for the development of a 230,000 barrels per day refinery project in the Duqm region of the sultanate.
According to a report in the Times of Oman, the Duqm Refinery Project comprises the development, construction and operation of the refinery, on-site utilities, infrastructure and storage facilities. This will also include the development of offsite facilities, including crude tank storage facilities in Raz Markaz, an 80-km crude oil pipeline to the refinery and a product export terminal at the Port of Duqm.
The report added that the refinery is designed to be able to process a range of blended crude oils and is configured as a full-conversion hydrocracker/coking facility, which will utilise advanced technology that is commercially proven for the scale of the project. This technology has been supplied by leading technology licensors, it added.
The Duqm Refinery Project will have the largest project financing in the Sultanate, with funding provided by 29 financial institutions from 13 countries, while insurance and guarantees (cover) are provided by three major Export Credit Agencies. The engineering, procurement and construction of the project are being undertaken under three lumpsum turnkey contracts, with world-class contractors operating on them, the report said.
The project comprises of an international commercial facility, an onshore commercial and an Islamic facility besides a United Kingdom (UKEF)-covered, a Spanish (CESCE)-covered, a South Korean (K-EXIM) covered facilities along with a K-EXIM direct facility, said the report.
Built as a a joint venture between Kuwait Petroleum International and the Oman Oil Company, is located in the Special Economic Zone in Duqm (SEZAD) along the south east coast of the sultanate.
The Duqm project, which is of strategic importance and a priority national investment for Oman, is also the first in other aspects.
It is the first major cross border refinery project in the Middle East region and is also the first joint venture of a refinery project in the region between government-owned oil companies of two Middle East countries said the report.
In addition, it is the first refinery in the Middle East to process crude from another Middle Eastern country on a long-term contractual basis, it added.