Join Webinar

Business News

Chinese group seeks crude from Oman, other GCC states for its planned refinery

Chinese group seeks crude from Oman, other GCC states for its planned refinery

A Chinese group, which is planning to build a second major refinery in Duqm, is trying to negotiate with the oil and gas ministries of Oman and some other Gulf countries for securing crude oil for its proposed refinery.

Apart from Oman, the Chinese group is also talking to other Gulf countries to secure crude oil for the proposed refinery, Ali Shah, chairman of Oman Wanfang LLC, told the Times of Oman in an exclusive interview. The proposed refinery, which will have a processing capacity of 230,000 barrels per day, will be similar in size to the $5.65 billion-Duqm Refinery currently under construction at the free zone.

"This is a big project. Now the Chinese group is negotiating for sources of crude for feeding the refinery. The Chinese Association for Chemicals is conducting a feasibility study now. It takes a long time—at least one year to complete (the feasibility study)," said Shah.

He also noted that although Oman has enough crude for the proposed refinery and a major chunk is exported, the proposed refinery will need alternative sources for ensuring secured supply. "We have already talked to several countries (including Oman), but a final decision has not been taken yet." The large storage facility planned at Ras Al Markaz will be advantageous for the proposed refinery.

If the refinery project is feasible and everything goes well as per the plan, it will take five to eight years to complete the project.

The refinery project will be part of the second group of companies that are conducting feasibility studies for setting up different industries in Duqm, after 10 projects signed their land lease agreements with Oman Wanfang in April this year. Although 25 additional projects are expected in the second group, it could vary, depending on the feasibility study, as well as market conditions.

China Oman Industrial Park

The China Oman Industrial Park, which has a huge area of 11.72 square kilometres, is divided into three main sections - heavy industrial area, light industrial area and mixed-use area (including a hotel). Oman Wanfang, which is a consortium of six Chinese private firms, will develop, manage and attract direct foreign investment from China for building a host of light, medium and heavy industries and tourism projects.

In a major push for the ambitious development programme of the Duqm free zone, 10 Chinese firms have signed land lease agreements for building various projects totalling an investment of $3.06 billion in April this year. These projects, which are expected to change the face of Duqm as a major manufacturing and trans-shipment hub, range from a $2.3 billion methanol venture to $406 million-power project and a five-star hotel.

According to Shah, it will take one to one-and-a-half years for the second batch of companies to sign land lease agreements with Oman Wanfang. These companies are now conducting market/feasibility studies on the proposed projects in Duqm. Unlike the first group of 10 companies, the second batch may come and sign the pacts in small groups, rather than all companies signing the agreements in one batch.
  • #oman
  • #china
  • #gcc
  • #crude oil
JSRS Banner
JSRS Banner