Orpic Logistics weighs plan for strategic fuel reserve

MUSCAT, OCT 14 - Having delivered a world-class fuel distribution hub and associated pipeline system, Orpic Logistics Company LLC — the fuel logistics arm of Oman Oil Refineries and Petroleum Industries Company (Orpic) — is now weighing plans for the establishment of strategic fuel reserves for the nation. The ambitious move is set to take fuel logistics to a new level in the Sultanate, effectively elevating Oman into the ranks of nations that have in place strategic stockpiles to secure their domestic requirements in the event of any emergencies or contingencies. “We are continuing to explore options to increase the capacity of the Al Jifnain Terminal (the nerve centre of the company’s fuel logistics infrastructure), especially to explore opportunities to dedicate tankage towards strategic reserves for the country,” said Andrés Suarez (pictured), General Manager — Orpic Logistics Company LLC. “We are working closely with the Ministry of Oil & Gas in this regard, although right now there is nothing tangible or concrete (to announce). The plans are there, and the discussions are ongoing.” The comments come on the first anniversary of the commercial launch of Al Jifnain Terminal – the centrepiece of the $336 million Muscat-Suhar Product Pipeline (MSPP) scheme, billed as one of Orpic’s strategic growth projects. The MSPP project comprises a network of pipelines that connect the Al Jifnain Terminal (located just outside Muscat Governorate) with Orpic’s Mina Al Fahal refinery in Muscat. Integrated with this network is a multi-product pipeline connecting Orpic’s Sohar Refinery with the Al Jifnain facility. A third pipeline connects the terminal with the New Muscat International Airport, supplying jet fuel by pipeline in place of tanker tanks. The total length of the pipeline is about 290 kilometres. Speaking exclusively to the Observer, Suarez noted that the proposed strategic fuel reserve would be established in a suitable location in the country. “It could be in Al Jifnain, but it could also happen anywhere else – we are exploring different options,” he said. Any expansion of the pipeline infrastructure beyond the current scope of the Muscat-Suhar Product Pipeline (MSPP) system, the General Manager explained, would hinge on significant growth in fuel demand in the Sultanate. “It will depend on growth in consumption, especially in areas that do not have a pipeline connection. It could be (extended) to Duqm, or could be up to Salalah, but consumption needs to grow first in order for a viable investment to be made in pipeline capacity, since distances involved could be around 1,000 km.” Orpic Logistics also operates a fuel depot located within the Port of Salalah, which serves as a hub for fuel distribution to filling stations across Dhofar Governorate. Around 15 per cent of the nation’s fuel requirement is met via this terminal, according to the executive. Two weeks ago, Orpic Logistics began pumping jet fuel directly from the Al Jifnain Terminal to the new Muscat International Airport via pipeline, effectively taking all tanker truck traffic between the terminal and the airport off the road network. Until the successful commencement of piped supplies of jet fuel, the airport’s requirements were met by a 50 – 60 tanker trucks daily, according to the executive. Tanker truck movements within the capital area have also dramatically fallen in the wake of the successful start-up of fuel distribution from Al Jifnain, said Suarez. “By shifting 70 per cent of the demand from Mina Al Fahal to Al Jifnain, we have removed 350 – 400 trucks daily from the road network, thereby contributing to easing traffic congestion on this stretch. Of course, we haven’t fully eliminated all tanker trucks because filling stations in the city still need to be served by trucks. But trucks heading to South Al Batinah and the interior parts of the country can proceed directly from Al Jifnain, without having to traverse the heart of Muscat,” he added. Orpic Logistics Company is a joint venture between Orpic and Spanish fuel logistics specialist Compañía Logística de Hidrocarburos (CLH). Conrad Prabhu