MUSCAT -- A contract will be signed here shortly for the construction of the estimated $1.5 billion plant of Aromatics Oman LLC at the Port of Sohar. Representatives of the project's promoters Oman Oil Company, Oman Refinery Company and LG International are due to meet in Muscat this week to ink agreements linked to the engineering, procurement and construction (EPC) of the plant. While Oman Oil Company (OOC) has a 60 per cent stake in the venture, Oman Refinery Company (ORC) and LG International have a 20 per cent share each. OOC and ORC are both owned by the Government of Oman.
Leading the government dignitaries at the signing will be Dr Mohammed bin Hamed al Rumhy, Minister of Oil and Gas and Deputy Chairman of OOC Board, while Nasser bin Khamis al Jashmi, Oil and Gas Under-Secretary and Chairman of the ORC Board, is expected to attend as well. LG International will be represented by its Executive Vice-President, while GS Engineering & Construction, which will undertake the construction of the plant, will be represented by its President and CEO. This week's agreement will mark a major milestone in the development of the aromatics plant, and comes one year after the shareholders signed a joint venture agreement establishing Aromatics Oman LLC last July.
The plant will produce around 1.2 million tonnes of paraxylene and benzene using feedstock from the newly commissioned Sohar Refinery. Paraxylene is a key raw material in the production of polyester fibres and PET plastic bottles. Benzene is an industrial chemical that can be used as feedstock for a variety of downstream applications like styrene, cumene, cyclohexane, linear alkylbenezene, and so on. It is used to produce a wide range of plastics (polystyrene, nylon), detergents and other chemicals.
The Aromatics Oman project will be fed by FCC gasoline and refinery naphtha from the 116,000 barrels/day Sohar Refinery. Significantly, the paraxylene plant, with a capacity of 812,000 metric tonnes/year, will be the world's single largest train. Initially, the entire output of paraxylene and benzene will be exported, but later a portion will be made locally available to a number of downstream industries that are expected to be set up in and around Sohar.
Financing for the project will come from the shareholders who will contribute 30 per cent of the project cost, with the balance from the combination of commercial bank financing and an overseas investment loan from Korea's state-owned Export-Import Bank (KEXIM). Recently, KEXIM announced that it had decided to lend $500 million to the project.
The commercial bank financing has been secured from a number of leading institutions from around the world including Societe Generale, Natexis, Royal Bank of Scotland, Korea Development Bank, Bank of Tokyo Mitsubishi, Mizuho, Calyon, BankMuscat, Arab Petroleum Investments Corporation, Arab Bank (in association with Oman Arab Bank), Arab Banking Corporation, Gulf International Bank, HSBC and Standard Chartered.
According to officials, the Aromatics Oman project will benefit from an expected 4.5 per cent growth in paraxylene demand over the next 10 years. The plant is scheduled to come on stream in the first quarter of 2009.
By Conrad Prabhu
© Oman Daily Observer 2006
