Oman Oil Company, the wholly Omani government owned energy investment vehicle, has announced plans to invest around $800 million in the establishment of a major petrochemicals plant at Sohar Industrial Port. Boasting a world-scale capacity of around 1 million tons per annum (mtpa), the project will manufacture Purified Terephthalic Acid (PTA) and Polyethylene Terephthalate (PET), both key ingredients that will not only extend the hydrocarbon value chain, but also drive investments in secondary and tertiary downstream industries.
According to a top official, a project company is under formation to oversee the implementation of the petrochemicals venture, which is expected to be built as part of the petrochemicals cluster within the industrial port. “We are in the process of establishing a company for the manufacture of PTA /PET,” Nasser bin Khamis al Jashmi, Oil and Gas Ministry Under-Secretary, who is also Chairman of Oman Oil Company, told journalists here. He was speaking after signing an agreement formalising Oman Oil’s acquisition of a 30 per cent stake in Vale Oman Pelletising Company, which operates a massive iron ore pelletising plant and distribution hub at Sohar Port.
Significantly, the proposed PTA/PET project will add to Oman Oil’s burgeoning investments in the rapidly expanding petrochemicals and refining sector in the Sultanate. The state-owned company owns stakes in the following key ventures: Salalah Methanol (100 per cent), Oman-India Fertiliser Company OMIFCO (50 per cent), and Oman Oil Refineries and Petroleum Industries Company — ORPIC (25 per cent). ORPIC groups the country’s two refineries at Mina al Fahal and Sohar, as well as the aromatics scheme and polypropylene plant that are integrated with the Sohar refinery. It is understood that the planned PTA/PET project is likely to source its feedstock requirements from the aromatics scheme at Sohar. The latter has a production capacity of 818,000 metric tons per annum of paraxylene and 198,000 metric tons of benzene. Paraxylene is the primary feedstock used in the manufacture of PTA and PET, according to experts.
PTA is a key raw material component in the polyester value chain, used mainly for the polyester industry to produce fibres and yarns. Commenting on ambitious plans for the establishment of a massive crude oil storage terminal at Ras Markaz on the Duqm coast, Al Jashmi said the project will not only serve as a strategic oil reserve for the country, but also provide storage capacity for commercial crude volumes. Given the vast waterfront expanse of Ras Markaz, the site is large enough to eventually house storage facilities for up to 200 million barrels of crude and petroleum products, making it one of the largest depots of its kind in the world, the Under-Secretary said.
Asked about likely partners in the venture, Al Jashmi stated: “Currently, it is mainly promoted by Oman Oil Company. But we have some potential clients in mind. Petroleum Development Oman (PDO) could be one of them. We are also talking to some clients from neighbouring countries that have shown interest, plus we are talking to others.”
Investment in the project will depend on the size of the facility, the official explained. “Right now, we are in the phase of evaluating that. First, we would like to ascertain the scale of interest. It will then be developed in phases. We are now in the study phase, and are working hard towards realising this project.”