Orpic (Oman Oil Refineries and Petroleum Industries Company SAOC) recently signed more than 15 agreements to build, operate and finance the Liwa Plastic Industries Complex. This project is considered to be the biggest industrial project in the Sultanate of Oman.
The feasibility study signifies that this project will contribute approximately 2-3 per cent towards the Oman’s GDP, and will create nearly 1,000 direct employment opportunities and more than 12,000 indirect job opportunities.
The signing ceremony of one of Oman’s largest projects financed in the downstream oil and gas industry was conducted in the presence of Government Ministers, Undersecretaries, Honourable Members of the Council of Oman, Orpic’s Board of Directors, senior managers of leading export Credit Agencies, Banking Institutions and Contractors, other high ranking officials and several members of the local community of Sohar and Liwa.
The Formal agreements were signed by His Excellency Sultan bin Salim Al Habsi, the Chairman, CEO of Orpic – Musab Al Mahruqi along with the CEOs and senior officials of awarded companies.
The Liwa Plastics Industries Complex Project (LPIC) project is poised to enhance the downstream sector in Oman as for the first time it will produce 880 thousand tons of polypropylene and polyethylene, which rates highest in terms of demand in the global market, and is used in 40 per cent of all applications of plastics.
It will also produce approximately 300,000 tons of polypropylene, which is considered the fastest growing plastic in the world and is among the first in terms of global usage and demand. LPIC is connected to the existing industries in the Sohar Industrial Port, and it will contribute towards increasing fuel production in Orpic’s Sohar Refinery and Aromatics Plant by about 232,000 tons annually.
Both Polypropylene and Polyethylene, which will be produced through this project, are rather vital as they are the main components in many essential plastics industries, including medical equipment, construction materials, electrical materials, automotive industries, electronics, and other packaging related industries.
Studies reveal that the global demand for these materials will increase during the next five years by around 35 million tons. The company currently produces 200,000 tons of polypropylene and the production of both materials is expected to increase to 1.4 million tons annually after the commissioning of this project.
His Excellency, Sultan bin Salim Al Habsi, Chairman, Orpic, stated, “this project will enhance the In Country Value of products and will provide the necessary materials to grow a downstream sector in the Sultanate, especially the plastics downstream industry. LPIC will enhance the contribution of the industrial sector towards domestic production and will create more than 13,000 new employment opportunities for talented Omanis.”
“Liwa Plastics Industries Complex Project aims to extract the maximum value from the Omani Oil and Gas particles and Petroleum Products produced in Sohar Refinery and the Aromatics Plant. 40 per cent of feedstock will be provided to this complex from Sohar Refinery and the Aromatics Plant, and 50 per cent will come from Natural Gas Liquids (NGL) extracted in Fahud plant, which will be transported through the suggested pipeline. Condensates produced by Oman Gas Company will provide the remaining 10 per cent of the required feedstock,” he added.
The different components of the project include:
– NGL extraction plant in Fahud.
– A 300 km pipeline for transporting NGL from the extraction plant in Fahud to Sohar Industrial Port.
– A Steam Cracker Unit in Sohar Industrial Port
– HDPE and LLDPE Plants in Sohar Industrial Ports
The overall cost of the project is estimated to be USD 6.4 Bn. International financial institutions will finance 60 per cent of the cost of the project. The Company has obtained loans from local banks to finance its contribution towards the project, which is 20 per cent of the overall cost of the project. The Government and Oman Oil Company will finance the balance cost of approximately 20 per cent.
Orpic awarded four contracts for Engineering, Procurement and Contracting (EPC) packages worth USD 4.5 Billion for LPIC project to:

• EPC 1 (Steam Cracker and Utilities): CB&I and CTCI Corporation Joint Venture
• EPC 2 (Plastics units): Tecnimont SPA
• EPC 3 (NGL Extraction): GS Engineering and Construction and Mitsui & Co. Ltd Joint Venture
• EPC 4 (NGL Pipeline): Punj Lloyd Ltd

Musab Al Mahruqi, CEO, Orpic, explained that the successful proponents were selected due to the strength of their technical and financial bids. He said, “This marks an important milestone in the history for Orpic and LPIC with the signing of the EPC contracts and finance agreements to cover majority of the finance required for this project.”
“We are confident that once the plant commissioning is completed in 2019, LPIC will change Orpic’s product mix by extracting more value from natural gas and crude oil. Being located in Sohar as part of an integrated complex that houses also Sohar Refinery, Aromatics Plant, Polypropylene and Steam Cracker Unit for LPIC, Orpic operations will be one of the most integrated refinery and petrochemical operations in the world and will enable the company to extract the maximum value from Oman’s oil and gas, he added.”
LPIC is one of three strategic growth projects being delivered by Orpic namely Sohar Refinery Improvement Project (SRIP), Muscat – Sohar Pipeline (MSPP) and Al Jifnain Terminal. These projects are certain to cement Orpic’s position as a market leader in Oman, the Middle East and the international oil and gas sector.