Orpic’s $9B Projects to Make Sohar a Top Petrochemical Site

Source: Times of Oman 8/1/2016, Location: Middle East

State-owned Oman Oil Refineries and Petroleum Industries Company’s (Orpic) $9 billion worth of ongoing projects will make the company’s Sohar site one of the best integrated refining and petrochemical sites in the world.

Among the three major ongoing projects, Sohar Refinery Improvement Project (SRIP) will overcome the constraints of Residue Fluidised Catalytic Cracking (RFCC) unit in the existing Sohar refinery and will enhance capacity by 70 per cent to meet the growing requirement of petroleum products in the country as well as supply additional volumes to aromatics and polypropylene plants, Musab Al Mahruqi, chief executive officer of Orpic, told ‘Times of Oman’. The project, with a capital expenditure of $2.7 billion, is scheduled for commissioning towards the end of 2016.

“With SRIP, Sohar Refinery will add 82,000 barrels per day (bpd) to its existing capacity of 116,000bpd – taking the total capacity to 198,000bpd,” he said, adding. This indicates a 70 per cent growth in fuel production – 141 per cent for diesel, 34 percent for gasoline, 98 per cent for kerosene/jet fuel, 93 per cent for LPG, 159 percent for naphtha and 56 per cent for propylene,” he added.

Another major venture - Muscat Sohar Product Pipeline (MSPP) project - will entail a pipeline connection between Mina Al Fahal Refinery, Sohar Refinery with an intermediate terminal at Al Jifnain, as well as the pipeline connection from Al Jifnain to the new Muscat International Airport.

The project comprises three key elements - a 290km multiproduct pipeline between Orpic’ss Mina Al Fahal Refinery and its Sohar complex; a terminal in Al Jifnain, in Muscat governorate; and a direct pipeline link from Al Jifnain to Muscat International Airport. The project, with a capital expenditure of $320 million, is in the execution phase and is expected to be commissioned by the second quarter of 2017.

Al Mahruqi said that Liwa Plastic Industries Complex (LPIC) is one of the biggest among the three major projects being executed by Orpic over the next four years. LPIC includes a steam cracker and its associated downstream units to utilise the refinery light ends and the C2+ from Oman’s natural gas in order to produce an additional 1.2 million tonnes of polymers annually as well as motor gasoline (MTBE). The project, which will have a capital expenditure of $6.5 billion, is in the EPC phase and is scheduled for commissioning in 2020.

Despite a challenging and fluctuating market environment, Orpic has managed to operate on a profitable track, though reliability of assets has turned out to be a concern. Orpic managed to enhance its business performance through a continuous improvement framework called “Quick Wins (QW)”. In the last six years, (end of May 2016), 133 QWs have been identified and implemented. These are a mixture of one off as well as recurring benefits. Overall, the total value is worth $665.3 million, said the CEO.

Orpic was established through the integration of three refining and petrochemical companies. During integration, there was no reduction in the numbers of employees as this is what the integration staffing process deemed best fit. However, the five year manning plan clearly indicated the need to double the workforce by 2020 and the board of directors agreed on the strategy of 1/3 wherein a third of new comers would be fresh graduate and diploma holders, Omani experienced hires and lastly from the business itself in order to give more opportunities to existing employees. It is evident that this strategy maximises opportunities and development for the existing employees thereby enabling us to bring the potential of our people alive.

Meanwhile, the consolidated revenue of Orpic in 2015 was OMR2.05 billion and the earnings before interest, taxes, depreciation and amortization (EBITDA) was OMR111 million.


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