13 April 2017
Muscat: Oman Oil Facilities Development Company LLC is in an advanced stage to secure 75 per cent funding for its $600 million-liquefied petroleum gas (LPG) extraction project in Salalah, a top-level official at its holding company—Oman Oil Company—said.

Oman Oil Facilities Development Company LLC is a wholly-owned subsidiary of the Sultanate’s investment arm Oman Oil Company.

Financial closure

The financial closure for around 75 per cent of total investment will be completed during the second quarter of this year, said Hilal Al Kharusi, executive managing director of Oman Oil Company. The company is discussing partial financing for the project with several international banks and export credit agencies.

The project has been developed by Salalah LPG SFZCO LLC—a wholly owned subsidiary of Oman Oil Facilities Development Co.

Petrofac to build the project

UK-based international oil services contractor Petrofac had bagged an Engineering, Procurement and Construction (EPC) contract to build the project in January this year, which will take three years to complete.

Petrofac’s scope of work include construction of the liquefied petroleum gas (LPG) unit with a capacity to produce 327,000 tonnes per annum and associated facilities, including tie-ins to existing pipeline infrastructure, together with LPG storage and jetty facilities at the Port of Salalah. According to an earlier report, the project is Petrofac’s eleventh major contract in the Sultanate.

The Salalah LPG extraction venture is expected to start operations in 2020.

Different products

The LPG extraction project will produce different types of LPG, mainly propane, butane and light condensate from natural gas flowing through Oman Gas Company’s southern grid.

Like other projects, Salalah LPG’s EPC contractor is focusing on enhancing in-country value by awarding sub-contracts to local small and medium enterprises, engaging the local supply chain and by strengthening local purchase of materials.

Petrofac designs and builds oil and gas facilities; operates, maintains and manages facilities and trains personnel; enhances production; and, where it can leverage its service capability, develops and co-invests in upstream and infrastructure projects.

© Times of Oman 2017