Kuwait Petroleum Replaces IPIC in Duqm Project
Oman Oil Company (OOC) has signed a Memorandum of Understanding (MoU) with Kuwait Petroleum International (KPI) to develop the Duqm refinery and petrochemical complex in Oman’s Al Wusta governorate. Both firms are aiming to form a long-standing partnership to own, manage and operate a refinery, with a petrochemical complex added in a later phase. It is expected that the companies will own equal shares in a joint venture company, and the prospective partners are said to be exploring additional participation by strategic third parties.
KPI replaces the original partner, Abu Dhabi’s International Petroleum Investment Company (IPIC), which decided to let another company take its place after concluding that the proposed new direction of the project that includes petrochemicals did not fit its investment strategy. Nizar Al-Adsani, deputy chairman and CEO of KPI’s parent, Kuwait Petroleum Corporation, said the collaboration with OOC helps achieve two major milestones: satisfying KPC’s strategy of investing in strategic markets and building strong economic ties with a sister Gulf Cooperation Council (GCC) country.
The CEO commented: “We all hope that this project will be the catalyst and ignition towards the start of similar projects in the energy field between GCC countries, where this mega project will ultimately lead towards transforming the Duqm area into one of the most important hubs for energy related industries regionally as well as internationally, eventually leading to a move from classical competition between GCC countries towards integrating and complementing each other.”
The refinery, with the capacity to process 230,000 bbl/day of crude oil, will be one of the growth engines for the Duqm special economic zone, providing development opportunities for other new projects that will directly and indirectly interface with the facility. The site’s strategic location in the path of international shipping lanes in the Indian Ocean and Arabian Sea is said to provide a competitive advantage.
A 900-hectare site has already been allocated and levelled for the project. A final investment decision is expected to be taken by the second quarter of 2017.