Sustainable Oman: Mining and energy projects forge ahead

Story – Team T

Oman is currently looking to expand its economy by growing its existing sources of income, and diversifying other sectors that will benefit the country.

Five areas of expansion have been selected under the country’s Tanfeedh plan for economic diversification: agriculture and fisheries, logistics and transport, energy and mining, tourism, and manufacturing. Oman’s plans for the future involve the integration of these services where possible with the country’s oil and gas sector, thereby providing growth across more than one area of the economy.

In terms of oil and gas, as well as the mining industry in Oman, the country’s budget for the year 2020 included several key projects, three of which involved products from the oil and gas sector, with a fourth being part of the still developing mining segment in the country.

Ras Markaz crude oil storage terminal project

Built as part of the massive developments currently underway at Duqm that is expected to help grow and diversify Oman’s economic output, the Ras Markaz storage terminal is being built some 70 km south of the town.

Owned by Oman Tank Terminal Company (OTTCO), the facility will be used to store oil ahead of its export and distribution to parts of the country. Other oil-producing companies can lease out tanks to store their own products ahead of these being transferred onto oil tankers.

“Ras Markaz crude oil storage terminal will start with a capacity of about six million barrels, but it will gradually rise in line with the needs of the company’s clients,” said OTTCO in a statement. “The area of the zone will allow increasing the storage capacity of the plant up to the level of 200 million barrels. This is among the strategic projects that will be implemented in the current five-year plan (2016-2020), targeting storage of all types of crude oil, and in large quantities, outside the Strait of Hormuz.

“Ras Markaz station for oil storage aims at achieving the goals of the future vision of the Omani economy represented in diversifying sources of the national income,” added OTTCO. “The project’s first phase includes the establishment of eight tanks with an estimated capacity of 650,000 barrels per tank, along with the establishment of floating platforms for the import and export of oil, and a marina for towing boats and undersea pipelines that measure seven kilometres in length for the purposes of receiving and exporting oil, in addition to the establishment of an oil pumping station.

According to OTTCO, the technical characteristics of the project make it possible to mix different types of crude oil, as well as load and unload ships in record time, allowing customers the possibility of saving logistics costs. The offshore installations that will be set up are capable of receiving various categories of oil tankers.

Salalah LPG Project

Designed to expand Oman’s gas output, the Salalah liquefied petroleum gas project in the southern governorate of Dhofar will see refined natural gas distributed to parts of the country for domestic use, as well as overseas for export.

One of the main contractors for this project is the global oilfield services company Petrofac, which is setting up, among other things, the storage facility at the Salalah Free Zone. According to Petrofac, the scope of work consists of the construction of the liquefied petroleum gas (LPG) unit and associated facilities, including tie-ins to existing pipeline infrastructure, together with LPG storage and jetty facilities at the Port of Salalah.

The project is owned by Salalah LPG, which is a wholly owned subsidiary of Oman Oil Facilities Development Company (OOFDC). Elie Lahoud, Petrofac’s group managing director, engineering and construction, commented, “Our eleventh contract in the Sultanate, this project reinforces our commitment to Oman where we have been present since 1988 and will further support our commitment to increase in-country value.”

“We will continue to maintain a strong focus on this aspect of our delivery, particularly by engaging the local supply chain and recruiting local resources,” he added. “We are very much looking forward to growing and strengthening our team working alongside OOFDC to deliver this project.”

The company says that impressive milestones have been accomplished throughout the project cycle, including the safe installation of huge dome roofs on two LPG tanks using nothing but air, something that was not done at Petrofac before.

Other companies involved with the Salalah LPG project are Al Nahda, which provided scaffolding services, Galfar, which provided instrumentation and telecommunication construction (CMEI) works, and Oman Gulf Company, which conducted excavation and filling duties.

Liwa plastics industry complex project

A plastics-producing facility is being set up in Liwa in the North Batinah governorate, about 230 km from Muscat, the plastics factory is expected to convert petrochemicals into plastics on-site. The project is owned by ORPIC (Oman Refinery and Petroleum Industries Company), and is expected to be completed in 2020.

The factory will enable the country’s plastics production to increase by one million tons, giving ORPIC a total of 1.4 million tons of polyethylene and polypropylene production. The massive project is being carried out across several stages, known as engineer procurement constructions (EPCs). Four EPCs have been established for the Liwa Plastics Industries Complex, and involve several companies around the world.

“The Liwa Plastics Industries Complex (LPIC) Project is a major capital investment project in Oman. The total investment value exceeds $6 billion, with financing provided by multiple international export credit agencies from Europe and Asia,” said a statement by Deugro, one of the companies responsible for transporting the truly massive pieces of equipment required for this project. “Owned by ORPIC, it shall increase Oman’s production of petrochemicals and increase fuel production, generating 450 direct jobs and over 1,200 indirect jobs in Oman to have a positive effect on the Omani economy.”

EPC1 involves setting up a steam cracker and the required utilities at a cost of $2.8 billion, through a joint venture between the United States’ Chicago Bridge and Iron Company (CB&I), which has now merged with McDermott International, and Taiwanese company CTCI. EPC2 will see the setup of the polymer plant by Italian company Technimont SPA, at a cost of $888 million, followed by EPC3, the natural gas liquid extraction plant by Japanese corporation Mitsui, and Korea’s GS Engineering and Construction.  

A pipeline connecting the natural gas extractor and the plastics plant is the crux of EPC4, to be carried out by Indian company Punj Lloyd at a cost of $112 million.

Copper mining project in Al Mudhaibi

Being built at a cost of OMR 25 million and with a cash flow of OMR 200 million, this project is being overseen by the Public Authority for Mining (PAM), and will be executed by Al Hadeetha Resources, a joint operation between Australian mining company Alara Resources, Al Hadeetha and Al Tasnim.

The project will see the establishment of a copper extraction plant in the Wilayat of Al Mudhaibi over an area of 39 sqkm. A statement from PAM said, “The exploration has continued at this and another two sites (Malq and Al Ajal) for more than six years, until copper was found in Wadi Andam in commercial quantities that exceed 16 million tonnes.”

The copper concentrator in Al Mudhaibi will process ores from these three sites, and will work on the extraction, processing and crushing of the ore, with a processing capacity of 800,000 tonnes annually.

“There is good economic feasibility that will benefit the country directly through taxes, royalties and direct employment for citizens and other services, and indirectly through supply, transport, rental of buildings or equipment and other needs that will support the local communities,” explained PAM.

“There will also be a commitment to CSR by mining companies per the mining law, through paying part of their revenues in developing the local community in these mining areas, in addition to supporting the small and medium enterprises,” the organisation added. “The concentrator will help in providing 100 direct job opportunities in the technical and administrative fields, in addition to the indirect job opportunities.”