$400m contract awarded for Oman’s first bitumen refinery project

Marking a key milestone in the implementation of a long-awaited and strategically vital project, an Oman-based company has signed a contract with a well-known Chinese engineering contracting firm for the construction of the Sultanate’s first bitumen refinery with an investment of over $400 million. Muscat-registered Sohar Asphalt LLC has tapped the China Chemical Hualu Engineering Company for the execution of the bitumen plant at Sohar Industrial Port. An engineering-procurement-construction (EPC) contract, valued at $408 million, was signed by the two sides in a virtual setting late last week, it is learnt. Sohar Asphalt LLC was established in 2015 to set up a 30,000 barrels per stream day (BPSD) capacity bitumen refinery designed to process heavy crude into bitumen as the main product, as well as atmospheric and vacuum distillates as byproducts. Annual production is estimated at one million tons of bitumen and 600,000 tonnes of naphtha, straight-run distillates and vacuum gas oil (VGO). The project’s strategic national significance lies in the fact that when fully operational by 2023, it will go a long way in alleviating Oman’s longstanding dependence on bitumen imports for road paving and related applications. A 27-hectare site has already been earmarked for the project adjoining the Sohar Refinery of OQ — the Sultanate’s integrated energy company — at Sohar Port. Heavy crude as raw material for the bitumen refinery will be sourced from a number of international producers, including from Central and South American producers. The feedstock will be shipped by crude carriers to the Port of Sohar and stored at the Liquid Terminal operated by Oiltanking Odfjell Tank Terminal (OOTT) at the port. Dedicated storage facilities will also be constructed at the site of the bitumen refinery. Importantly, the project’s output of straight-run bitumen, which is primarily used in road paving, will be exported to a number of markets in the Gulf and the Indian-continent. The Omani market is expected to be an important consumer as well.