Duqm Refinery eyes global markets for fuel exports

LANDMARK SCHEME: Documentation for financing arrangements likely to be completed by June

Countries in Europe, Far East and even Africa are seen as potential markets for the prodigious quantities of clean petroleum fuels that will be produced once the new Duqm Refinery comes on stream in 2021, according to a top official of the landmark project.

Jacobus Nieuwenhuijze (pictured), Acting CEO and Project Director, said Duqm’s geographical location overlooking the Indian Ocean offers strategic advantages in accessing key markets for the refined petroleum products that will begin flowing from the refinery in just over three years from now.

“The location of Duqm is absolutely fantastic in serving the East, West and Africa,” said Nieuwenhuijze. “We are looking at Africa in the future because, if you look at World Bank predictions for population growth in the continent, it is projected to rise from 2.5 billion to around 5 billion within 20 years. They will require fuel,” the official added in comments to journalists soon after joining dignitaries at ceremonies marking the groundbreaking at the site on Thursday of Oman’s single biggest energy investment.

Oman Oil Company (OOC), the energy investment arm of the Omani government, and Kuwait Petroleum International (KPI) are 50:50 partners in Duqm Refinery, which is being established with an investment of around $7 billion.

“We have been waiting for this moment for several years, and we are finally here!” said the Acting CEO, voicing his delight at the imminent start of construction work on the giant project. “The project will be implemented in accordance with not only Omani environmental regulations, but also in line with the Equator Principles prescribed by the World Bank,” he noted, referring to the risk management framework adopted by financial institution, for determining, assessing and managing environmental and social risk in project finance.

Commenting on the financing of the project, Nieuwenhuijze said around 50-60 per cent of the project finance would come from lenders. “We envisage having, by mid-june, all of the financing documents ready for signing,” he stated, citing the complexity of working with more than 20 international banks for the financial arrangements.

Ahead of the start of the physical construction of the mammoth scheme, which is coming up on a 900-hectare site at the Special Economic Zone in