Saudi Arabia's SABIC, Oman's OQ to explore petrochemical project in Duqm

Saudi Basic Industries Corp., the biggest petrochemical maker in the Middle East that is 70% owned by Saudi Aramco, and Oman's state-owned energy company OQ signed a memorandum of understanding to study the development of a petrochemical project in the Duqm Free Zone.

"The non-binding MOU lays the preliminary and indicative terms for the potential study, and expresses the intentions of the two sides to discuss and assess the feasibility of the project," Sabic said in a Dec. 7 statement.

"The project involves a world-scale steam cracker unit and derivative units producing olefins derivatives (ethylene and propylene) which are expected to utilize the feedstock by-products from the SCU."

Oman is developing the Duqm Free Zone, south-east of the country, to become a major energy hub for the Middle East's biggest oil producer outside OPEC.

Oman's 230,000 b/d Duqm refinery is expected to come online in the first quarter of 2023, the head of project management at the facility Yousuf Al-Jahdhami told state-run Oman News Agency on Oct. 30, as the country sought to process crudes other than its own.

According to Jahdhami, construction of the refinery is 87% complete.

The refinery, which will cost more than $8 billion, has faced numerous delays since construction started in 2018.

Joint venture refinery

The facility is a 50:50 joint venture between Oman's OQ and Kuwait Petroleum International called Duqm Refinery and Petrochemical Industries Co.

Once operational, the Duqm refinery will receive 65% of its crude from Kuwait, and the remaining 35% will be Omani crude, with both grades stored at Ras Markaz Oil Storage Park in the Duqm Special Economic Zone.

The refinery will mainly produce diesel, jet fuel, naphtha and LPG, Jahdhami said.

Oman is putting the finishing touches on Ras Markaz Oil Storage Park, the Duqm Special Economic Zone said in an Aug. 15 tweet, that can eventually hold more than 200 million barrels as the country seeks to attract international oil companies to park their crude in the country.

Ras Markaz Oil Storage Park will have an initial capacity to hold 25 million barrels starting Q1 2022, Salim al-Hashmi, project general manager at developer Oman Tank Terminal Co., said in the quarterly issue of the Duqm Economist Magazine published in July.

The storage park will be connected to Duqm refinery through an 80 km long pipeline and eight tanks built to store the facility's oil.