The engineering consultancy services arm of Spanish contracting giant Tecnicas Reunidas (TR) has won a contract to undertake the basic engineering and front-end engineering design (FEED) of a new grassroots bitumen refinery planned at Sohar Port & Freezone in the Sultanate.
The project is being developed by Sohar Asphalt LLC, an Oman-registered company owned 90 per cent by Al Mashael Group, an independent petroleum trading and investment corporation wholly owned by Shaikh Mohamed bin Salman bin Abdulla al Khalifa of the Kingdom of Bahrain. The balance 10 per cent is held by a leading Omani businessman.
Plans drawn up by Sohar Asphalt envisage a 30,000 barrels per stream day (BPSD) capacity bitumen refinery designed to process heavy crude into bitumen as the main product, as well as atmospheric and vacuum distillates as byproducts. Annual production is estimated at one million tonnes of bitumen and 600,000 tonnes of naphtha, straight-run distillates and vacuum gas oil (VGO).
“TR engineering has been engaged to develop basic engineering and FEED for the entire project. The project facilities include Atmospheric and vacuum distillation units, sour water stripper unit, storages, associated utilities and off sites. Crude oil will be imported and bitumen and the distillate products will be exported by sea,” the Spanish engineering firm announced in a statement posted on its website.
Earlier, Indian engineering firm McNally Bharat Engineering Company had announced that its 50:50 special purpose vehicle (SPV) with Oman’s EMC Group had been awarded an Engineering-Procurement-Construction (EPC) contract valued at around $315 million for the actual execution of the bitumen refinery at Sohar.
The company had stated in filing to the Bombay Stock Exchange (BSE) at the time that the contract covers construction, detailed engineering, construction supervision, mechanical commissioning and delivery of the bitumen project. Importantly, Sohar Asphalt’s project promises to support the development of a major export-oriented bitumen manufacturing hub in Sohar. Orpic, the nation’s refining and petrochemicals flagship, has already included a major bitumen production component as part of its multibillion dollar Sohar Refinery Improvement Project (SRIP). Bitumen output from the upgraded Sohar Refinery, due to come on stream in Q1 2017, is projected at around 300,000 tons per annum.
Of the two bitumen ventures, first off the block is set to be Orpic’s SRIP which will begin delivering locally produced bitumen for the first time in the Sultanate’s modern history. Oman has been entirely dependent on imports, primarily from neighbouring Iran and the United Arab Emirates, for its requirements of bitumen which is used for, among other things, asphalting in road construction projects. Imports of bitumen have burgeoned on the back of escalating investments in road construction and related infrastructure programmes.
While only a small percentage of the combined output of the two bitumen plants in Sohar will be consumed locally, the vast proportion will be exported to markets in the wider Middle East and Asia, thereby generating new revenue streams for the Omani economy, experts point out.