Oil and Gas - - SPECIAL EDITION -

Oman Oil Com­pany (OOC) in 2016 ap­proved the Oman Oil In­fra­struc­ture Ver­ti­cal’s new strate­gic plan that was de­vel­oped based on OOC’s di­rec­tion to have a fo­cused en­ergy in­fra­struc­ture busi­ness stream re­spon­si­ble for all of OOC’s en­ergy in­fra­struc­ture ac­tiv­i­ties.

As a re­sult, the ver­ti­cal’s vi­sion is to

“Be the re­gional cham­pion in en­ergy in­fra­struc­ture with a global pres­ence”, and the new cor­po­rates’ mis­sion is summed up in Three Fun­da­men­tal Goals: • To build on our po­si­tion as the ref­er­ence Gas Trans­mis­sion Sys­tem Op­er­a­tor in Oman.

• To diver­sify in other en­ergy sec­tors, lev­er­ag­ing on the sta­ble rev­enues from reg­u­lated ac­tiv­i­ties.

• To cap­ture in­ter­na­tional growth op­por­tu­ni­ties.

The “En­ergy In­fra­struc­ture Compa ny” will be fo­cus­ing in three main busi­ness units: Oil, Gas, and Power. In the Gas Busi­ness Unit, OGC rep­re­sents the group’s reg­u­lated gas ac­tiv­i­ties and al­ready op­er­ates a re­li­able and safe gas trans­mis­sion net­work, and the new strat­egy of this pil­lar mainly fo­cused on con­sol­i­dat­ing the gas trans­mis­sion net­work and the im­ple­men­ta­tion of the new Reg­u­lated As­set Based model (RAB) by 2018. In ad­di­tion to de­vel­op­ing en­gi­neer­ing and project man­age­ment, pro­cess­ing and ex­trac­tion of all kind of gases and oil by-prod­ucts, and gas stor­age and dis­tri­bu­tion projects.

To­day, not all Omani gas pipe­lines are owned and op­er­ated by OGC. Fol­low­ing a con­sol­i­da­tion ap­proach, fur­ther pipe­lines op­er­a­tor­ship and own­er­ship could be trans­ferred to OGC, and in­vest­ing in build­ing new gas stor­age sites could also help in­crease Oman’s se­cu­rity of gas sup­ply. Salalah LPG (SLPG) is a ma­jor project within the non-reg­u­lated Gas group and meant to build an LPG ex­trac­tion fa­cil­ity at the gov­er­nance of Dho­far. The Salalah LPG Ex­trac­tion Project is deemed to be the first of its kind in Oman and con­sists in the in­stal­la­tion of a gas treat­ment plant to ex­tract LPG and con­den­sate from OGC’s gas net­work. The plant will process about 8.6Mn Sm3/d of gas sat­is­fy­ing with that the lo­cal LPG de­mand as well as ex­port­ing about 90 per cent to the in­ter­na­tional mar­ket.

The SLPG plant is ex­pected to be on­line by 2020 cost­ing ap­prox­i­mately $ 826Mn

The other ma­jor busi­ness within the non-reg­u­lated gas group will be the Fahud Nat­u­ral Gas Liq­uid Ex­trac­tion “NGLE” plant on be­half of Oman Oil Re­finer­ies and Petroleum In­dus­tries Com­pany (Or­pic) which is yet an­other op­por­tu­nity that is be­ing cap­i­tal­ized to de­velop the port­fo­lio of the ver­ti­cal as well de­vel­op­ing ex­per­tise in this seg­ment of busi­ness.

In the Oil Busi­ness Unit, Oman Oil In­fra­struc­ture Ver­ti­cal will be look­ing into ex­pand­ing its pres­ence and ex­per­tise in the mid­stream crude oil and petroleum prod­ucts sec­tor. The ver­ti­cal will be in­volved in oil lo­gis­tics and dis­tri­bu­tion en­tail­ing pipe­line trans­porta­tion, stor­age, ship­ping, and mar­ket­ing.

The oil pil­lar will be led by Oman Tank Ter­mi­nal Com­pany (OTTCO). OTTCO as­pires to lead the Oil Pil­lar by fa­cil­i­tat­ing the flow of oil to the world through op­er­at­ing a world-class oil stor­age in­fra­struc­ture. To achieve this, OTTCO is work­ing on Three Key Projects next to the 230k bpd Duqm Re­fin­ery meant to po­si­tion Duqm as the En­ergy Hub of Oman:

1. A large scale crude oil stor­age ter­mi­nal at Ras Markaz, lo­cated ap­prox. 70km south of Duqm, with a nat­u­ral water depth of 32 me­ters that can ac­com­mo­date VLCC,

2. Crude oil pipe­line from Oil fields (Na­hade) to Ras Markaz (400km), and an

3. Oil prod­uct stor­age in Port of Duqm.

The project is ex­pected to be on-steam by H2 2020 cost­ing ap­prox­i­mately $430 Mn. Hav­ing frag­mented do­mes­tic oil as­sets leave space for a con­sol­i­da­tion re­gard­ing crude oil and petroleum prod­ucts lo­gis­tics, es­pe­cially for pipe­line trans­porta­tion and stor­age.

For that, the ver­ti­cal will be work­ing on the pos­si­bil­ity of ac­quir­ing as­sets of mid-stream sec­tor and on in­te­gra­tion of stor­age units and oil dis­tri­bu­tion un­der one com­pany by 2018.

In the Power Busi­ness Unit, Oman

Oil In­fra­struc­ture Ver­ti­cal will build its growth strat­egy upon do­mes­tic and in­ter­na­tional op­por­tu­ni­ties in power gen­er­a­tion.

As part of its vi­sion to lead the do­mes­tic power gen­er­a­tion sec­tor and the en­ergy tran­si­tion, the ver­ti­cal’s strat­egy looks into the es­tab­lish­ment of an in­vest­ment arm in con­ven­tional en­ergy pro­duc­tion and re­new­able en­ergy sec­tor as well as in­te­grated ser­vices by 2019 in col­lab­o­ra­tion with po­ten­tial part­ner, thereby adding ad­di­tional ca­pac­i­ties.

In June 17, Mu­san­dam Power Com­pany (MPC) suc­cess­fully reached the Com­mer­cial Op­er­a­tions Date (COD) of its 120MW dual-fuel power plant lo­cated in Wi­layat Bukha, Mu­san­dam Gov­er­norate. MPC is con­sid­ered the first Omani power project lead de­vel­oped by an Omani de­vel­oper. Fur­ther­more, in 2017 the com­pany was awarded a Sil­ver Award by Asian Power for Gas Power Project of the year.

The ver­ti­cal is plan­ning to go for an Ini­tial Pub­lic Of­fer (IPO) of MPC (up-to 40% of the shares) by 2018. Work is in progress per­tain­ing the IPO, wherein the strat­egy is be­ing fi­nalised. This will be first Power IPO for Oman Oil group com­pa­nies in Oman and in­vest­ment team will be work­ing for the suc­cess of the IPO.

Cen­tralised Util­ity Com­pany (CUC) is also project un­der the ver­ti­cal and is a de­vel­oper that is aim­ing to be a One Stop ser­vice provider per­tain­ing to util­ity ser­vices in Duqm Spe­cial Eco­nomic Zone (SEZAD).

CUC’s vi­sion is to be the pre­ferred and lead­ing in­te­grated util­ity de­vel­oper for in­dus­trial zones in Oman and glob­ally. CUC is cur­rently in the process of fi­nal­is­ing its Power and Water Pur­chase Agree­ment with Duqm re­fin­ery, Nat­u­ral Gas Sup­ply from the Min­istry of Gas and award of EPC con­tract for the con­struc­tion of the Power and Water Plant. The project is ex­pected to be on­stream by 2020 with es­ti­mated cost­ing of around $ 540 Mn.

The ver­ti­cal will also be look­ing into in­vest­ing on re­new­able en­ergy with ini­tial fo­cus on So­lar Pho­to­voltaic

(PV) tech­nol­ogy for its sig­nif­i­cant and im­me­di­ate po­ten­tial for growth. The ver­ti­cal ac­cord­ingly is look­ing for­ward to par­tic­i­pate in the gov­ern­ment ten­der floated in Q4 2017 based on Re­quest

For Pro­posal (RFP) for the coun­try’s first large scale so­lar in­de­pen­dent power project.

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