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Contract Awarded for Oman Salalah Petrochemicals Project

Source: www.gulfoilandgas.com 10/21/2012, Location: Middle East

Salalah Free Zone (SFZ) is rapidly acquiring the trappings of a major petrochemicals hub with construction due to commence early next year on yet another world-scale project. The caustic soda and ethylene dichloride venture, promoted by Saltic LLC FZC, is being developed with an investment estimated between $500 Ė 600 million. When operational in 2015, the project will add to a growing cluster of large-scale petrochemical schemes at the free zone, currently comprising a methanol plant run by Salalah Methanol Company, and a giant PET complex owned by OCTAL Petrochemicals.

Additionally, the latest venture will not boost liquid cargoes handled by the adjoining Port of Salalah, but also open up opportunities for investment in an array of downstream value-added investments. It is understood that a leading South Korean firm has been selected by Saltic LLC FZE, an Oman based company registered at Salalah Free Zone, to execute the project on an Engineering-Procurement-Construction (EPC) basis. The company led a field of more than half a dozen leading bidders that participated in a global tender floated by WorleyParsons Oman. Work on the project is due to begin in earnest in January 2013, with completion slated around the middle of 2015.

Plans drawn up by Saltic envisage a state-of-the-art complex with a capacity to produce 1,000 tons per day of caustic soda and 1,231 tons per day of ethylene dichloride. The project will be built on a roughly 35 hectare plot acquired from Salalah Free Zone on a 25-year lease (extendable). Caustic soda, one of two principal products of the Saltic plant, has extensive application in a number of industrial processes involving the manufacture of textiles, detergents, pulp and paper, and drain cleaner products, besides potable water production.

Ethylene dichloride (EDC), on the other hand, is used for manufacturing vinyl chloride monomer (VCM), which is the key raw material for producing polyvinyl chloride (PVC). Moreover, sodium hydroxide, a byproduct of the Saltic project, can be utilized in the refining of bauxite to produce alumina. According to officials, the ethylene feedstock for the project will be sourced from markets in the Middle East, as well as via a major Japanese trading firm with which a supply contract has already been signed.

Salt, another key raw material, will be procured from Australia. The plantís output of EDC and caustic soda has been committed to Japanese traders under offtake agreements, it is learnt. Meanwhile, Saltic LLC FZC is close to achieving financial close on the project, with bank muscat providing financial advisory services to the company in this regard.

All other approvals necessary for the early commencement of construction work on the project have also been obtained, officials have stressed. Dhofar Power Company has committed electricity loads of up to 150MW for the project, while agreement has also been reached with Salalah Port for access and use of its port facilities. It is understood that a major liquid jetty current under construction as part of the portís ongoing expansion, will facilitate the handling of ships bringing feedstock for the project, as well as for the loading of liquid cargoes for export.

Significantly, the Saltic project will add to Omanís rapidly diversifying portfolio of petrochemical schemes, that currently includes plants producers methanol, urea and ammonia, polypropylene, benzene and paraxylene, Polyethylene Terephthalate (PET), and so on. Oman Oil Company is also investing in a petrochemicals plant that will add Purified Terephthalic Acid (PTA) to this mix. In joint venture with IPIC of Abu Dhabi, Oman Oil Company is also looking at developing a large-scale petrochemicals hub alongside a major refinery planned at Duqm.

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