Oman to start new Duqm refinery by early 2022

Oman expects to start commissioning its 230,000 b/d Duqm refinery in late 2021 or early 2022, earlier than previously anticipated, oil minister Mohammed bin Hamed al-Rumhy told Argus.

The refinery — which will produce primarily diesel, jet fuel, naphtha and LPG — had been expected to start up in October 2022. But the $7bn project — a 50:50 joint venture between Oman's state-owned OQ and Kuwait's state owned KPI — is already "more than 60pc complete" and may process its first crude at the end of 2021 or in early 2022, al-Rumhy said.

The first phase of a 200mn bl crude storage facility in Ras Markaz, around 80km south of Duqm, is on track, although Oman is taking a more gradual approach to that project. The country had planned to build 8mn bl of storage capacity for the initial phase but will instead construct 6mn bl of storage to meet the needs of the new Duqm refinery. Further capacity will be added depending on internal requirements and interest from external parties.

"Now we are getting requests from some of our friends, who have nothing to do with the refinery, but just want storage. And that is what we are working on now. This is including ourselves, because we have very limited storage here," al-Rumhy said.

Oman hopes that the location of Duqm and Ras Markaz, outside the strait of Hormuz but near to international shipping lanes, will enable it to become a logistics and marine hub serving not only the Mideast Gulf region but also markets in Africa and Asia-Pacific. "With the storage and terminal, you build as you go along. But yes, it has a capacity of 200mn bl ... the place is huge," said al-Rumhy.

Duqm's feedstock will comprise 65pc Kuwaiti crude and 35pc Omani crude, both stored at Ras Markaz. A pipeline linking the Ras Markaz facility with the refinery is expected to be ready for commissioning by mid-2021, al-Rumhy said.

Chemically enhanced

While work on the refinery is ahead of schedule, development of Oman's first integrated petrochemicals facility at Duqm is progressing as planned, with operations due to start in 2026, al-Rumhy said. The initial engineering and design phase for the 1.6mn t/yr integrated petrochemicals plant is expected to be completed by the first quarter of next year, and construction is due to start by 2022, he said.

The $8bn facility will produce ethylene from selected Duqm refinery product streams, including LPG, straight-run naphtha, off-gases and natural gas liquids (NGLs). Oman awarded 12 technology contracts for the petrochemicals complex last month.

US engineering firm Lummus Technology was selected to provide technology for the mixed-feed steam cracker, as well as NGL extraction and C4 block unit technology. Global petrochemicals company LyondellBasell will provide the technology for the production of 280,000 t/yr of polypropylene and 480,000 t/yr of polyethylene, while US-based Honeywell UOP will provide the technology for aromatics.

By Ieva Paldaviciute