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Sohar Refinery project documents signed

Source: 12/16/2003, Location: Middle East

MUSCAT — The project documents for the $1.2-billion Sohar Refinery project was signed by Ahmed bin Abdulnabi Macki, minister of national economy and deputy chairman of the Financial Affairs and Energy Resources Council and Maqbool bin Ali Sultan, minister of commerce and industry at Al Bustan Palace Hotel, yesterday.

Ministers, undersecretaries, managers of banks operating in the Sultanate and officials of the national economy and oil and gas ministries attended the meeting.

Lenders to the Sohar Refinery project is expected to sign financing agreements in London tomorrow.

The documents signed yesterday included five sub-agreements. The first document agreement on financing guarantees between the government and lending authorities was signed by Ahmed bin Abdulnabi Macki, Maqbool bin Ali Sultan, and Dr Mohammed bin Hamad Al Romhi, minister of oil and gas on behalf of the Sultanate’s government and the representative of Societe Generale who signed on behalf of the lending authorities.

ONA adds: The second agreement relating to government guarantees was signed by Macki and Romhi.

The third pact relating to utilisation of land was signed by Malik bin Sulaiman Al Ma'amari, transport and telecommunications minister and Dr Romhi.

The fourth agreement relating to oil refining was signed by Romhi and the chairman of the Oman oil refinery company's board.

The main contractor agreement was signed by Romhi. Romhi said Sohar Refinery is the first refinery project to be successfully financed in the banks market in the Middle East within the last ten years.

He added in a press statement that 90 per cent of the project's total cost was financed through debt, adding that this project is the biggest project to be financed in the Sultanate after the LNG project.

He noted that the Japanese Bank for International Cooperation offered a direct loan of a $261.9 million, while Nippon Exports Insurance Company provided a joint financing of $261.9 million and that 10 international and regional banks agreed to offer a loan of $907.8 million.

He added that the Sohar Refinery will construct a new refinery to refine fuel oil with a capacity of 116,4000 barrels per day and a fuel oil distilling unit with a capacity of 75,260 barrel per day.

He said the project is of special importance to the government owned Oman Oil Refinery as it will treat its fuel oil produced at Mina Al Fahal, noting that a 250km long pipeline will be set up to transport fuel oil and crude oil from Mina Al Fahal to the refinery which is located near Sohar Port with its good storing and loading facilities.

He pointed out that the Finance Ministry owns 80 per cent of the Sohar Refinery project, while the Oman Oil Company owns the remaining 20 per cent.

Romhi said the refinery will initially market 10 per cent of its products inside the Sultanate and export the remaining 90 per cent. He noted that the shareholders spent more than $200 million.

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Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 

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