Price and market trends: Orpic to start work on Sohar plastics project in Oman by the end of 2013

07 June 2013 10:05  [Source: ICB]

Project in Oman wil use NGL feedstock and is expected to be completed by 2018

Oman Refineries and Petroleum Industries Co (Orpic) is planning to begin work on the front-end engineering design (FEED), and to select a technology provider for its $3.6bn (€2.8bn) integrated Sohar plastics project before the end of the year, said CEO Musab al Mahruqi.

The project, together with the soon-to-commence Sohar refinery improvement project, will produce most of the key petrochemical ingredients that constitute the essential building blocks of a potential plastics industry in Oman.

 Orpic already operates an aromatics plant at the site

Copyright: Orpic

The Sohar plastics project, scheduled to be completed by 2018, will have six components - a gas extraction plant in Fahud near gas production fields, a 300-km long pipeline between Fahud and Sohar Industrial Port for transporting gas, a steam cracker unit, a high density polyethylene (HDPE) plant, a linear low density polyethylene (LLDPE) plant and a polypropylene (PP) plant, Al Mahruqi said in a presentation at the Polyolefin Plastics Arabia Conference on 28 May.

Around 60% of the feedstock for the Sohar plastics project will come from the existing Sohar refinery, while 40% will be natural gas liquids (NGL) extracted from gas fields of Fahud, he said.

The project, which will be integrated into the existing Sohar refinery, PP and aromatics units, will produce PE, PP and additional gasoline and benzene.

"For the first time in Oman, it will enable the utilisation of heavier components of natural gas, collectively known as C2+, comprising ethane, propane, butane and condensate," Al Mahruqi added.

The Sohar plastics project will provide good returns to the state-owned firm and its shareholders, as well as produce the petrochemical building blocks that will open up further opportunities for the plastics industry in Oman, he said.

 The new units will be incorporated into the existing petrochemical infrastructure at Sohar

Copyright: Ryan Lackey

Building the plastics project close to the refinery will result in one of the most efficient and integrated refinery and petrochemical complex in the world, he added.

Total investment for the project - which is behind schedule by two years - and the Sohar refinery expansion is estimated at $5bn.

Once commissioned, the plastics project will enhance both fuel and plastics production. By 2018, Orpic's plastics production will increase to 1.4m tonnes/year from 200,000 tonnes/year currently, while fuels production will touch 11.3m tonnes/year from the current output of 7.3m tonnes/year.

Upon completing the upgrade of the Sohar refinery, Orpic's output of fuels will increase by 4.2m tonnes/year to reach an overall aggregate production of 13m tonnes/year by 2016.

In terms of revenue, the Sohar refinery upgrade is expected to grow Orpic's revenue to over $14bn in 2016 from around $10bn in 2012. Revenues will grow further by $1.4bn after the plastics project is operational in 2018, Al Mahruqi said.

By: Aamir Ashraf

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