Top 10 Oman infrastructure projects
Despite the decline in global oil prices, Oman isn’t planning to cut spending on infrastructure projects
Despite the decline in global oil prices, Oman isn’t planning to cut spending on infrastructure projects, especially on those seen as vital to economic diversification. Here are 10 of the top infrastructure projects in the pipeline.
1. KHAZZAN & MAKAREM GAS FIELDS DEVELOPMENT
Owner: Ministry of Oil & Gas
Budget: $16bn
Progress: EPC contracts
BP is developing tight gas reservoirs in Block 61 and the Khazzan and Makarem gas fields that cover an area of some 2,800 sq km. The Khazzan Project has the potential to deliver up to 30% of Oman’s gas supply in 2020. The formal agreement between Oman and BP for the development of the project was ratified in February 2014. BP plans to drill around 300 wells over 15 years to deliver plateau production of 28.3Mcm/d of gas and 25,000bpd of gas condensate. So far, the company has awarded $4bn worth of contracts, including a $1.2bn engineering, procurement and construction (EPC) contract for building the central processing facility (CPF), and two longterm drilling contracts totalling $730m.
2. OMAN NATIONAL RAILWAY PROJECT
Owner: Oman Railway
Company (ORC)
Budget: $15. 5bn
Progress: EPC stage
Oman’s national railway network comprises 2,244km of track with 35km of tunnels, 40km of bridges, 50 terminals and eight marshalling yards. The network, which will connect the ports of Sohar, Duqm and Salalah, will comprise a double nonelectrified track carrying both freight (120km/h max speed) and passenger (220km/h max speed) traffic. Three consortia – Korea Rail Network Authority (KRNA), Técnicas Reunidas and Parsons International – have been shortlisted for the Project Management Consultancy (PMC) contract, which has yet to be awarded. ORC’s EPC tender for the 207km Phase 1 stretch between Sohar and Buraimi has attracted 18 bidders. The construction contract is expected to be awarded by mid-2015.
3. BATINAH EXPRESSWAY CONSTRUCTION PROJECT
Owner: Ministry of Transport & Communications
Budget: $3.9bn
Progress: Work underway
One of the biggest road projects in Oman, the Batinah Expressway will act as an extension of the Muscat Expressway and run for 265km to the Oman-UAE border. To be complete by 2018, the expressway will have four lanes on each side, with 75 interchanges and tunnels. The first 11 packages, including six main packages, have already been floated and are under various stages of planning and construction. Work has started on Packages 2, 3 and 4, while contracts are being finalised for Packages 6, 7, 8, 9, 10 and 11. Parsons International and Turkey’s Bosphorous Technical Consulting Corporation (BOTEK) rendered consultancy services for the project.
4. LIWA PLASTICS PROJECT
Owner: Oman Oil Refineries and Petroleum Industries Company (ORPIC)
Budget: $3.6bn
Progress: RFQ stage 2
The Liwa Plastics plant will be the country’s first steam cracker, allowing it to produce a range of products and providing several opportunities for downstream industries. The client has completed the first of the two-stage prequalification process for the four EPC packages – an 859KTA steam cracker, 880KTA polymer units, a natural gas liquids (NGL) extraction unit and a 300km-long NGL pipeline. According to Muscat Daily, the Invitation to Tender (ITT) will also be issued in two stages. The first stage is planned to start at the end of January 2015, with the basic design engineering package information and the conditions of contract issued to the bidders. The second stage is scheduled for the end of March 2015, once the FEED is finalised.
5. SOHAR REFINERY IMPROVEMENT PROJECT
Owner: ORPIC
Budget: $2.1bn
Progress: construction underway
SRIP aims to overcome the existing technical constraints resulting from the change in the quality of the Oman Export Blend (OEB) and meet the increasing demand for refined products. Sohar Refinery will add 82,000bpd to its existing capacity of 116,000bpd, taking the total capacity to 198,000bpd. The ground breaking for the project was done in June 2014. A joint venture of Petrofac and Daelim was awarded the EPC contract in November 2013. Recent developments include the appointment of Trowers & Hamlins as legal counsel to advise the consortium of 21 local and international financial institutions funding the project. In November 2014, Majis Services was awarded a contract for long-term supply of cooling seawater to the project.
6. DUQM OIL REFINERY DEVELOPMENT PROJECT – PHASE 1
Owner: Oman Oil Company
Budget: $6bn
Progress: Expression of Interest (EoI) stage
The project is being developed by Duqm Refinery and Petrochemical Industries Company (DRPIC), a 50:50 joint venture of Oman Oil Company and Abu Dhabi’s International Petroleum Investment Company (IPIC). In March, Foster Wheeler was awarded the Front-End Engineering Design (FEED) contract for project. The first phase will see the development of a 230,000bpd grassroots merchant export refinery within the Duqm Special Economic Zone (SEZ). Designed as a full conversion refinery, the plant will use delayed coking technology for bottom-of-the-barrel processing. The second phase is being planned as an associated petrochemical complex.
7. BIDBID – SUR DUAL CARRIAGEWAY PROJECT
Owner: Ministry of Transport & Communications
Budget: $1.1bn
Progress: Under construction
The project connects the cities of Bidbid and Sur with a 247km, six-lane highway, and also includes the building of nine interchanges, two underpasses, two overpasses, associated retaining wall structures and about 171 reinforced concrete culverts. In February 2011, a joint venture of Italy’s Astaldi and Turkey’s Ozkar Insaat was awarded the $325.2m Phase 1A, while a JV of UAE’s Habtoor Leighton and Turkey’s STFA was awarded the $300m Phase 1B. Phase 2 was awarded in February 2014, with the $251m Phase 2A going to L&T Oman and local KAS Construction bagging the $233m Phase 2B. In August 2014, Hill International was awarded the Project Management Services contract.
8. PTA & PET COMPLEX PROJECT – SOHAR PORT
Owner: Oman Oil Company
Budget: $600m
Progress: EPC award in 2015
The project involves an EPC contract to build a Purified Terephthalic Acid (PTA) plant with capacity of 1.1 MTPA and a Polyethylene Terephthalate (PET) plant with capacity of 500,000 TPA. In December 2012, the client signed a Joint Development Agreement with South Korea’s LG International (LGI) to implement the scheme. The JV company is owned 70% by the client and 30% by LGI. Initially put on hold in 2013, the project was revived in March last year with the award of the project management contract to WorleyParsons to oversee the EPC phase. In October 2014, it was announced that the FEED was almost complete and the client was planning to tender the EPC contract at the beginning of 2015. Last month, SOHAR Port and Freezone signed a deal with OMPET to set up a 0.25 TPA PET facility.
9. SUR STEEL PLANT PROJECT
Owner: Sun Metal Casting
Budget: $400m
Progress: Construction underway
The project involves setting up an integrated steel mill with capacity of 2.5m t/y of liquid steel, which will be converted into finished saleable products such as TMT re-bars, low alloy rounds, carbon construction and low alloy sections, and stainless steel seamless pipes. South Korea’s Posco Engineering and Construction will undertake the project planning, engineering, procurement, construction and operation and maintenance of the plant. Japan’s Sojitz Corporation has been appointed as raw material supplier and finished product offtaker. Sojitz will also supply the plant equipment. Most of the steel products are for the domestic market and the larger Gulf region. When operational, tentatively in 2017, it will be the first non-petroleum-based industrial investment in Sur Industrial Estate.
10. MUSCAT – SOHAR PRODUCT PIPELINE
Owner: ORPIC
Budget: $300m
Progress: EPC stage
The project involves building a new 280km product pipeline to connect refineries in Sohar and Muscat. Last month saw the signing of the EPC contract for the project between Orpic Logistics Company (OLC) — a joint venture between ORPIC and Spain’s Compañía Logística de Hidrocarburos (CLH) – and the consortium of Oman’s Gulf Petrochemical Services (GPS) and Spain’s Abantia and Diseprosa. The financing agreement, which will cover 70% of the project value, has been given to Ahli Bank and Ahli United Bank (AUB). The construction of the pipeline and oil tanks facility will start in the first quarter of 2015, and the project is due to be commissioned in the second quarter of 2017. The pipeline is expected to reduce heavy fuel-tank truck traffic in Muscat by 70%.
