Duqm Refinery and Petrochemical Industries (OQ8), which was inaugurated last week at a high profile event attended by the leaders of the Sultanate of Oman and the State of Kuwait, has aspirations to expand capacity in the future, as well as diversify its market base.
The 230,000-bpd-capacity project, a 50-50 joint venture between Oman’s OQ Group and Kuwait Petroleum International (KPI), is described as the most modern of its kind in the region. Built at a cost of around $9 billion at the Duqm SEZ, the project is also expected to catalyse the growth of a larger downstream industry centring around petrochemicals and other sustainable chemicals.
Speaking to Bloomberg, OQ8 CEO David Bird said the company does indeed have plans to ramp up capacity. “Absolutely, we have very bold ambition plans. This was always meant to be a phased investment,” the CEO said, alluding in particular to the reference to ‘petrochemicals’ in the company’s formal name.
“Our official company name is Duqm Refinery and Petrochemicals Company with OQ8 as our brand. So yes, we have very bold growth ambitions. However, I would say we have to grow and that's what we're excited now. First, a very successful startup. Obviously the project's come through significant challenges of COVID and other supply chain interruptions, but demonstrating the appeal of the region and Oman where we can deliver a greenfield project so successfully started up so well in 2023 and now we're going for stable and efficient operation to earn our right to grow.”
In the interview, Bird also underlined the expanding appeal of the refinery’s output of fuels and petrochemical feedstock, with some products having found their way to distant markets. While 50% of the output is marketed by the trading arms of the two principal shareholders – OQ Trading of Oman and KPC of Kuwait – OQ8 will play its part as well, he said.
In particular, OQ8 plans to leverage Duqm’s strategic location to target markets around the Indian Ocean, said the CEO. “I think the Indian Ocean this century will be the area where we see the most growth. So we're very excited by our proximity to India, the Indian subcontinent, and also East Africa. I think the African continent will experience significant growth that we're all keen to be a part of, given our location.”
Markets in Europe are also in OQ8’s sights, said Bird, citing the refinery’s ability to meet the continent’s “most stringent fuel quality specifications”. Nevertheless, some shipments have also reached markets further afield in a sign of the refinery’s widening appeal, he noted.
“I must say we've been pleasantly surprised where some of our products have ended up, and we've seen significant volumes go as far afield as Brazil, Gulf Coast of the US but also in East Africa.”
Boding well for OQ8 performance amid fierce competition in the global refining industry is its young age. “The average age of refineries in some parts of the world is more than 70 years. And by being one of the youngest refineries in the world, we are the most automated, the most efficient, the most data rich as well, which creates further opportunity for leveraging technology and AI to be the most competitive refinery in the world,” he added.
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