Oman imports diesel, petrol to meet growing demand

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The Omani government has been forced to start importing diesel and petrol with the Sultanate’s two refineries struggling to meet growing local demand, it was reported.

It comes despite plans by state-owned Oman Refineries and Petroleum Industries Company (Orpic) to invest $5-$6bn in the next five years to expand the Sohar Refinery, build the Liwa Plastics project and set up a 280km-long crude oil pipeline between Muscat and Sohar.

According to the Times of Oman, the import will continue for another two to three years until Sohar refinery's 60,000 barrels per day (bpd)-expansion goes on stream around 2016.

Sohar and Mina Al Fahal refineries in Muscat, which are both owned by Orpic, have a combined capacity of 222,000 bpd, including Sohar refinery's 116,000 bpd capacity.

However, the facilities are struggling to keep pace with local demand for petroleum products, which is growing at 10 to 15 percent annually.

“This year, we started importing fuels to cover the shortage in case of both refineries to meet the total national demand," Orpic chief executive officer Musab Al Mahruqi was quoted as saying by the Times of Oman.

"This shortage will continue to increase year after year for the next two to three years."

Al Mahruqi, who was speaking at the commissioning of the Sohar Refinery's Wet Gas Scrubber unit, it would be importing petroleum products in small quantities on behalf of the government for the next two years.

“The quantity may increase due to the growth in demand. However, we will maintain at least 80-85 per cent of the production from the refineries,” he said.

Orpic is planning to enhance Sohar Refinery's processing capacity by 60,000 barrels per day (bpd) to 176,000bpd, as well as the $3.6bn Liwa Plastics project and the 280km-long pipeline.

Al Mahruqi said that the Sohar Refinery's improvement program was in the final stage of tender evaluations.

Six major international engineering companies have submitted bids, with South Korea's Samsung Engineering Co the lowest bidder at OMR728m ($1.89bn) when the Tender Board opened the bids last week, he said.

He said the front-engine engineering design contract for Liwa Plastics was expected to be awarded before the end of the year.

Al Mahruqi said that all the three projects were on track.

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