Page 10 - DMEA Week 01

DMEA POLICY DMEA
Oman sheds light on oil industry overhaul
OMAN
Consolidation can cut costs.
OMAN’S government has announced further details on its plan to overhaul its state oil sector by merging upstream and downstream opera- tions into one company.
In late December it revealed that a new entity known as OQ would be set up to manage of the operations of Oman’s national oil company OOC and its refining group Orpic. OQ will also take charge of OOC’s upstream arm OOCEP, Oman Gas (OGC), Duqm Refinery and Petrochemicals Industries (DRPIC), Salalah Methanol (SMC), Oman Trading International (OTI), oxo inter- mediates derivatives producer Oxea and Salalah Liquefied Petroleum Gas.
The rationale behind the so-called Nakhla integration programme is for Oman to stream- line its downstream business ahead of the start-up of new refining and petrochemical pro- jects in the coming years.
Orpic is bringing on stream new polymer plants which should start production in the near future. They will boast an annual output of 330,000 tonnes per year of polypropylene and
880,000 tpy of polyethylene.
Meanwhile, the new 260,000 barrel per day
DRPIC refinery is slated to start operating in late 2022. A 1.6mn tonne per year mixed-feed steam cracker should be ready to start working at the site by 2026, along with petrochemical deriva- tives units.
Middle Eastern petrochemical producers have been pushing for greater consolidation over the past year in a bid to cut costs and become more competitive. Saudi-based Sip- chem last year merged its business with that of fellow Saudi group Sahara Petrochemicals. Saudi Aramco later revealed plans to snap up a majority stake in state-run petrochemical pro- ducer Sabic.
The petrochemical segment is seen an attrac- tive pocket of growth in an oil market with an otherwise bearish outlook. Middle Eastern states are looking to build more plants to add value to their oil and gas exports. But competition in the sector is picking up, with an increasing number of new players entering the market. ™
REFINING
Algeria awards $3.7bn refining contract
ALGERIA
Algeria wants to cut its fuel bill.
ALGERIA’S Sonatrach has handed a $3.7bn contract to South Korea’s Samsung Technologies and Spain’s Tecnicas Reuinidas to build a new refinery in Hassi Messaoud, northeast Algeria.
The plant will be capable of processing 5mn tonnes per year (100,000 bpd) of oil, helping the North African country cut its fuel import bill, Sonatrach said in a statement on January 9.
“The signing of this contract confirms our desire to further develop our hydrocarbon resources into refined products,” Sonatrach CEO Kamel Eddine Chikhi commented. This will “satisfy the needs of the national market” while also contributing to the “economic and social development of the country,” he continued.
Algeria currently imports more than 12mn tonnes of diesel and 9mn tonnes of gasoline each year, while domestic fuel production comes to only 11.5mn tonnes per year. Accord- ing to Sonatrach, the Hassi Messaoud facility will annually produce 2.66mn tonnes of diesel, 1.73mn tonnes of gasoline, 228,000 tonnes of
kerosene, 180,000 tonnes of butane, 134,000 tonnes of bitumen and 127,000 tonnes of butane. These fuels will comply with Euro-5 standards, it said.
Construction work is due to wrap up within 54 months, under the contract, bringing the refinery’s completion date to March 2024.
Sonatrach took its time selecting contractors for the project, launching a selection tender back in 2017. Seven companies filed bids for the work, but only four were considerable eligible.
The Algerian firm valued the contract award at DZD440bn ($3.7bn). Tecnicas said separately that its share of the deal was worth $2bn. Both Tecnicas and Samsung have worked on major refinery projects in Algeria in the past.
Algeria currently has five oil refineries and one gas condensate plant in operation with an overall throughput capacity of around 650,000 bpd. It has been slow to develop its refining sec- tor to meet rising fuel demands, owing to diffi- culties attracting foreign investment. ™
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w w w. N E W S B A S E . c o m Week 01 11•January•2020