In the countdown to the award of Liwa Plastics Project (LPP), Orpic (Oman Oil Refineries and Petroleum Industries Company) has announced the award of two major contracts. They are for the Project Management Company (PMC), and the Front End Engineering and Design (FEED), which includes the cracker licence.
The former was picked up by Engineers India Limited (EIL) of New Delhi, and the latter by the Chicago Bridge & Iron Company (CB & I) operating out of The Hague, Netherlands. This is a clear demonstration of how rapidly LPP is becoming a reality, keeping well on track with its swift schedule. LPP is the largest project of its type in Oman and is valued at US$3.6 billion. 12 companies were asked to tender for the PMC contract, in a rigorous and diligent process that began in August/September 2013, before EIL emerged as Orpic’s choice.
The FEED and Cracker licence process began at around the same time and included the only four companies worldwide which have the licensed technology to take on a specialized project of LPP’s size and complexity. CB & I’s FEED contract will lead into the tendering stage for LPP’s Engineering, Procurement and Construction (EPC), with one of the FEED stipulations being that the decision on pre-qualifying companies should be finalised before the end of 2014. The plant will be established in Sohar Industrial Port Area, adjacent to Orpic’s refinery and petrochemical plants. “The award of these contracts is an indication of the momentum that LPP is beginning to build,” said Musab Al Mahruqi, Orpic CEO, “the project is moving rapidly forward and we are determined to deliver on LPP’s promise for Orpic and for Oman. It will transform our company and deliver a ripple of economic value to the nation.”
LPP is scheduled for completion in 2018 and expected to double Orpic’s profitability through extracting significantly more value from every barrel of Omani crude and molecule of gas. The project, which revolves around a steam cracker unit, will enable Orpic to produce polypropylene and, for the first time, polyethylene, the plastic most in demand globally, which will boost Oman’s export earnings. At the same time and with additional production of 1 million tonnes of plastics, the country’s downstream plastics industry will have the opportunity to grow, with the promise of more downstream industries, additional employment, and overall additional In-Country Value.
LPP will also result in direct employment by Orpic through the construction and operational phases of the project. Over 350 operators will be required on a permanent basis as well as 150 technicians, with 7,000 FTEs (Full Time Equivalents) during the construction stages.
With the completion of LPP, Orpic will be producing a total of 1.4 million metric tonnes of polyethylene and polypropylene a year. In addition to the steam cracker, five other components combine to make up LPP. Three different plastics plants (Polypropylene, Linear Low Density Polyethylene and High Density Polyethylene) will be constructed, as well as a natural gas extraction plant in Fahud and a 300km pipeline from there to the Sohar complex. Approval for LPP’s natural gas allocation was received from the Ministry of Oil and Gas in 2013.
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