Exports of a range of refined petroleum products from Duqm Refinery (OQ8), currently nearing completion at the Special Economic Zone (SEZ) in Duqm, are scheduled to commence early next year, according to a top official of OQ Group, the Omani-owned integrated energy group that has a 50 per cent stake in the venture.
Talal al Awfi, Group CEO – OQ SAOC, said the 230,000 barrels per day (bpd) capacity refinery project is set to come on stream before the end of this year. However, output will be predominantly exported during the initial years of operation pending the planned construction of a mega downstream petrochemicals complex designed to add further value to OQ8’s refined products.
“We have faced significant challenges in recent times; however, I am highly optimistic that by the end of 2023, we will witness the complete start-up of OQ8, with the aim of achieving first export by early 2024,” Al Awfi stated in a recent interview featured in The Energy Year, a leading energy-centric news portal.
Duqm Refinery and Petrochemical Industries Company (OQ8) is a 50:50 partnership of OQ Group and Kuwait Petroleum International. At full capacity, the refinery will produce liquefied petroleum gas, naphtha, jet fuel, diesel, sulphur, and petroleum coke.
Describing the refinery as a “significant asset” for the country, Al Awfi said efforts are underway to maximize value creation from OQ8 through the development of a downstream petrochemicals complex.
“Although at the beginning the majority will be exported to international markets, a main objective will be to utilise some of the refined products, especially naphtha and LPG, in the domestic downstream sector,” he said.
“Overall, we are investing significantly to further develop the downstream sector, as shown by the joint development agreement we signed at the end of 2022 with SABIC (of Saudi Arabia) and Kuwait Petroleum International (KPI) to study the possibility of building a petrochemical plant in the Special Economic Zone at Duqm (SEZAD). The key idea behind all these projects is to maximise in-country value, and one way is by expanding further in the value chain by utilising the products produced domestically.”
Importantly, the new refinery will strengthen Duqm’s positioning as a new hub for hydrocarbons overlooking the Arabian Sea and Indian Ocean beyond. Taken together with the Raz Markaz crude oil storage terminal located nearby, the refinery has the potential to drive the inflow of foreign direct investment (FDI) into the SEZ, he noted.
Phase 1 of the storage terminal was completed last December and integrated with the refinery via an 80-km pipeline. The terminal has since taken delivery of three shipments of crude of a total volume of around 4 million barrels.
Around 26.7 million barrels of crude can be stored at this stage, effectively making Raz Markaz the “largest oil storage and export project in the Middle East”, Al Awfi stated.
Going forward, Raz Markaz has the potential to catalyze the growth of a wider industry that supports investments in an array of associated tank storage activities.
“Stored oil can be used for several purposes, from blending to trading, and we want to explore each one because there is no limit on land, Duqm being a vast area that is still under development. Besides, particularly with its capacity for expansion, the Ras Markaz terminal ticks all the boxes to be a successful, strategic asset, having world-class infrastructure behind it and an advantageous geographical location away from the Strait of Hormuz,” he added.
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