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Oman Business News

Orpic focuses on strengthening ICV while building Liwa Plastics complex

State-owned Oman Oil Refineries and Petroleum Industries Company (Orpic) has major plans to strengthen in-country-value (ICV) and local employment, while building its mega Liwa Plastics Industries project, with a total capital expenditure of $6.5 billion.

The ICV and procurement teams have begun a new practice to ring-fence a number of tenders who are suitable to small and medium enterprises, in terms of their capabilities to ensure 10 per cent allocations to local businesses, Christiaan van der Wouden, chief operating officer of Orpic, told Times of Oman.

We have allocated a certain scope for either SMEs or local suppliers for those scopes, which are currently being undertaken by international suppliers,” he added.

The company’s ICV strategy is to support business development, human capability development, and productivity stimulation in the Omani economy through the retention of maximum in –country value. To achieve this, the ICV department aims at reaching authentication (made in Oman) of the materials procured by Orpic and development of human capital in all Orpic projects, by ensuring at least 30 per cent Omanisation across all categories and levels.

Sustainable development of Omani small and medium enterprises (SMEs) will be assured through the support of those directly linked to Orpic’s business.

Local small and medium enterprises are expected to immensely benefit from the business opportunities, which include sub-contracting works, purchase orders, and support services available from major contracting firms.

Orpic has already awarded four major packages to multinational contracting firms for building Liwa Plastics Industries, at a total cost of $4.5 billion.

Employment potential:
The Orpic COO said that the LPIC project is expected to create about 900 direct, and some 12,000 indirect jobs, during the project lifetime.

Upon commissioning in 2020, Liwa Plastics Industries Complex will transform Orpic’s product mix and business model, double company profits, create new business opportunities, generate significant employment opportunities and support the development of a downstream plastics industry in Oman.

With the highly integrated complex in Sohar, including refineries, aromatics plants, steam cracker and downstream polypropylene and polyethylene plants, the operation will be one of the best integrated refinery and petrochemical facility combinations in the world, and will be able to achieve the maximum value-add for Oman’s hydrocarbon molecule.

Currently, we are in a detailed engineering phase. Our people have been deployed at the EPC’s offices in Seoul, Milan, The Hague and New Delhi and,overall, the project is on track,” noted Wouden.

The ground breaking ceremony for the Sohar part of the LPIC project was held in October 2016.

Liwa Plastics Industries Complex is the largest of the three strategic growth projects (Sohar Refinery Improvement Project and Muscat Sohar product Pipeline) undertaken by Orpic to achieve its vision of building an Omani integrated refining and petrochemical business.

Commercial production is scheduled for early 2020.

Following LPIC’s commissioning, plastics production is forecast to increase by more than one million tonnes, giving Orpic a total of 1.4 million tonnes of polyethylene and polypropylene production.

“We have a dedicated polymer marketing team that looks after the marketing and distribution of our ‘Luban,’ brand,” he added.

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