MUSCAT: Future pathways for growth, identified by OQ Base Industries (OQBI) — Oman’s only integrated producer of methanol, ammonia, and LPG products — include the potential to venture into the production of a wide array of downstream derivatives at its complex in Salalah Free Zone.
OQBI, presently wholly-owned by OQ Group, is preparing to offer 49 per cent of its share capital via an Initial Public Offering (IPO) on the Muscat Stock Exchange (MSX) starting from as early as next week. The offering is expected to raise up to $490 million (at the top of the price offer range).
According to details shared by the company to prospective investors, OQBI has the potential to significantly ramp up the capacities of key base commodities, as well as diversify further downstream into the derivatives market. The combined nameplate capacity of the integrated plant currently stands at 1,816k tonnes per annum (tpa).
“The Company has several growth pathways available, including a near-to-medium-term opportunity for the brownfield expansion of the existing methanol plant, as well as long-term opportunities to expand into downstream products and to develop low-carbon ammonia products,” it said.
A planned foray into the downstream derivatives market could see OQBI upgrading its existing methanol and ammonia plants to manufacture products such as acetic acid, urea formaldehyde resin and various ammonium phosphates, nitrates and sulphates, OQBI explained.
“The Company has identified acetic acid and urea formaldehyde resin as the most attractive potential expansion opportunities. Acetic acid serves as an intermediate for vinyl acetate monomer (VAM) and purified terephthalic acid (PTA) for polyethylene terephthalate (PET) production.”
Citing the findings of its Market Consultant, Argus Media, the company stressed that a possible foray into derivatives could capitalise on soaring global demand for many of these products. Demand for acetic acid, estimated at 17 million metric tonnes (mmt) in 2023, is projected to rise by an additional 6 mmt by 2030.
Likewise, global demand for urea formaldehyde resin — a polymer used in downstream industries, including adhesives, building materials and moulded objects — is anticipated to grow from 21 mmt in 2023 to around 25 mmt by 2030.
Similarly, an upgrade of the existing LPG plant could contribute to the production of derivative products, including polyacrylamide and butadiene, said OQBI.
Brownfield expansion
Another pathway for growth envisions the brownfield expansion of OQBI’s 1,095k tpa methanol plant by around 50 per cent — a move designed to capitalise on methanol demand, according to the company. Capital investment in the expansion is estimated at $470 million, with completion expected in Q4 2028 (assuming a final investment decision is targeted in Q1 2026).
A brownfield expansion would also enable the company to capture ongoing enhanced returns through a shared commercial platform and economies of scale post-production, OQBI noted. Additionally, the expansion would align with the Company’s wider decarbonisation efforts, yielding an approximate 20 per cent increase in conversion efficiency.
Longer term, OQBI says it is 'well-positioned' to capitalise on emerging opportunities in low-carbon ammonia and methanol, particularly for marine fuels and energy applications.
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