Oman Oil Refineries and Petroleum Industries Company: Putting Oman on the petrochemical map

May 8, 2017 in Mining

Along with oil and gas revenues, a number of Middle Eastern companies have seen dynamic grown in the petrochemical sector in recent decades. Within Oman, few companies have enjoyed the success and speed of growth of Oman Oil Refineries and Petroleum Industries Company (Orpic).

Orpic’s refineries in Sohar and Muscat, as well as the aromatics and polypropylene production plants in Sohar, provide fuel, chemicals, plastics and other petroleum products, to Oman and the world.

“Owned by the Government of the Sultanate of Oman and Oman Oil Company SAOC, Orpic’s impressive integration of refinery and plant operations coupled with its ambitious growth plans, has cemented its position as one of the industry’s most forward-thinking companies. The company currently recruits around 2,000 employees who work towards the common goal of an integrated Omani refining and petrochemicals business,” the company website describes.

“Orpic is committed to operating safely and reliably, while paying due care to the environment and the communities within which it operates. The company strongly believes in serving Oman with pride,” the site continues.

Orpic is Oman’s national refining and petrochemicals company providing 100 per cent fuel to the nation.

It is a jointly owned venture concerning the Government of Oman and Oman Oil Company, and operates four plants, with its commitment to Oman underlined by the fact that 70 per cent of the workforce is Omani.

All of which is very impressive, given that the commissioning of Oman`s first refinery, at Mina Al Fahal “MAF” in Muscat, only took place in 1982.

The refinery, built under the patronage of His Majesty Sultan Qaboos, started operations later that year with an initial design capacity of 50,000 barrels per day (bpd) and is operated by Oman Refinery Company (ORC).

Expansion continued throughout the next couple of decades and in 2004 work started on the construction of the Sohar Refinery. Progress continued with the commissioning of important pipelines and in 2006 Oman`s first Polypropylene plant was commissioned, with the Sohar Refinery opening. The new refinery was complemented in 2007 by Oman`s first Polypropylene plant, which opened at the same time. This plant has a capacity to produce 350,000 metric tonnes of polypropylene, a polymer used in the manufacture of a wide range of plastics materials, each year.

Also in 2007 came news that Oman Refinery Company had merged with Sohar Refinery Company to create Oman Refineries and Petrochemicals Company. By 2010 the latest step in the development of Sohar`s petchem complex came with the construction of the Aromatics Plant in the Sohar Industrial Port. The plant, which began operations in 2010, produces 818,000 metric tonnes per annum of paraxylene and 198,000 metric tonnes of benzene.

The following year saw the launch of the Orpic brand and the company has not looked back since.

In June of 2016, the company celebrated its fifth anniversary. In a press statement it announced:

“Orpic underwent a formal integration of its four plants (Sohar Refinery, Mina Al Fahal Refinery, Aromatics Plant and Polypropylene Plant) into one integrated refinery and petrochemical company in June 2011. These Plants were integrated from three companies – Oman Refineries and Petrochemicals Company LLC (ORPC), Aromatics Oman LLC (AOL) and Oman Polypropylene (OPP).

“Since then, Orpic has gone onto becoming one of the fastest growing refining and petrochemicals business not just in Oman but also in the region. Orpic’s impressive integration of refinery and plant operations, and its ambitious growth plans, has cemented it as one of the industry’s most forward-thinking companies – with around 2400 employees working towards the common goal of an integrated Omani refining and petrochemicals business of which the Sultanate is proud.

“Shortly after the integration, Orpic embarked upon major diversification and a USD 9 billion expansion plan, which saw the evolution of three strategic growth projects (Sohar Refinery Improvement Project [2016], Muscat Sohar Product Pipeline [2017] and Liwa Plastics Industries Complex [2020]).  This has been undertaken to ensure full utilization of the growth project outcomes and their smooth and synchronized integration into Orpic. The program targeted all aspects of operational and non-operational processes, policies, procedures, people and tools and comprised two facets: Developmental Readiness Plan and specific focus groups which aimed at identifying, highlighting and solving critical challenges before commissioning and their amalgamation with Orpic.

“Upon commissioning, over the next few years, these projects will triple Orpic’s asset value to around USD 12 billion and increase profitability by around 4 times. The growth will also double the number of employees in Orpic and increase the company’s contribution to gross domestic product (GDP) from 6 per cent in 2014 to potentially 8 per cent in 2020.

“Orpic has created a new way of working – RITE (Reliability, Integration, Talent Management and EBIDTA). These are the company’s guiding principles that help Orpic achieve its targets. Orpic firmly believes that, “These are the ways we choose to work, the ways we choose to achieve success.”

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“Through this integration, Orpic seeks to identify any additional opportunities or advantages that result from the integration with existing business in its mission to be a leading performer.”

The celebrations have been just the tip of the iceberg during a busy 2016. In March Orpic announced that it had closed a USD 3.8 billion project financing facility for its USD 6.5 billion landmark Liwa Plastics Industries Project (LPIC).
Commenting on the significance of LPIC’s project financing, Orpic CEO Musab Al Mahruqi said, “Orpic’s LPIC project is part of our long-term growth strategy to firmly enter into the petrochemical market. This financing facility, which is the largest ever project financing transaction to be achieved in the Sultanate of Oman, is an indication of the level of confidence and support Orpic has from key institutions and stakeholders.” 
Mr. Al Mahruqi added “LPIC represents a robust and resilient project to lenders – satisfying the highest international environmental and social requirements, and provides the appropriate frameworks to address each of the technical, commercial and legal challenges which customarily arise on major world-scale petrochemical projects. The Company has been able to successfully secure financing amid challenging global financial and economic conditions and with limited government guarantees which reflects the trust that international financing institutions have placed on the project and the investment climate within the Sultanate.”

Orpic completed the financing of LPIC on a highly accelerated timetable, which was designed to coincide with the scheduled commencement of works on the project construction packages. Commissioning for the LPIC Project is scheduled to be completed in 2020.

That same month the company celebrated the graduation of 320 Omani trainees at a gala ceremony in Sohar. These graduates are part of Orpic’s comprehensive training programme which Orpic undertakes on a yearly basis. The event also celebrated the completion of training program for 23 employees which was conducted in the Republic of India.

The students underwent an intense 4 month classroom training and 8 months on-the-job training. For diploma holders, the schedule included 6 months classroom training and 6 months on-the-job training.

“Orpic firmly believes in supporting the national In-Country Value programme and hence believes in nurturing and developing young Omanis to take on roles in line with the company’s long term strategic growth plan. Since the programme commenced in 2011, Orpic has trained more than 1,000 young Omanis to take on positions across different internal disciplines. Over the next years, the Orpic training program will aim at training more than 500 new graduates to join a competent national cadre to operate the current and upcoming plants,” the company stated in a pres announcement.

Speaking on the occasion Nofal Al Saidi, GM – Human Resource Services, Orpic, stated, “Orpic has an ambitious plan to expand its business through its investments in Sohar Refinery Improvement Project, Liwa Plastics Industries Complex, Muscat Sohar Product Pipeline with a total cost of approximately USD 9bn which will be commissioned over the next three years. This means that our need for both new and skilled manpower will increase tremendously. As part of our commitment to support the national drive, we have be training and developing young Omanis to take on various roles. Their development will also be supported by mentors and function heads who will actively seek to nurture and guide these young minds into a bright future whilst bring the potential of our people alive.”

Orpic continues to underline its credentials as a progressive company. In June 2015 news broke that the company had let a contract to MAN Diesel & Turbo SE (MDT), Augsburg, Germany, for work related to the overhaul and revamp of the residue fluidized catalytic cracking (RFCC) unit at its Sohar refinery.

MDT provided project management as well as supply parts and comprehensive engineering services for the complete shutdown and overhaul of Sohar’s RFCC plant during a planned maintenance turnaround of the refinery in the spring 2016.

As part of the contract, MDT’s factory in Deggendorf, Germany, manufactured a series of major components associated with the revamp, including air grids, internal domes, and a new regenerator head, all of which were then shipped during October 2015 for arrival at Sohar in January 2016.

This contract and project forms part of Orpic’s Sohar Refinery Improvement Project (SRIP), a brownfield, multibillion dollar modernization project that includes major technical improvements to the existing refinery.

Designed to improve the plant’s ability to overcome existing technical constraints associated with processing the changing quality of Oman Export Blend (OEB) crude, SRIP also will enable the refinery to meet international environmental standards, serve growing domestic demand for refined products, and enhance the refinery’s competitiveness and profitability.

Last year, ORPIC said SRIP’s RFCC revamp aims to improve the unit’s feed quality to meet design parameters, meet the polymer-grade propylene demand of the polypropylene plant, maximize additional gasoline and diesel production, ensure that all fuel products from the refinery conform with Euro IV norms and meet current product specifications where these are better than Euro IV, produce naphtha for the aromatics plant, and equip the refinery to produce bitumen and petcoke.

According to a description of the project included in tender documents, Orpic decided to undertake the RFCC overhaul following a 2013 turnaround, during which the company discovered severe damage to the primary and secondary cyclones of Regenerator-1, as well as tremendous coke accumulation in the reactor plenum.

In November 2015 news came through that Omani company TMK Gulf International Pipe Industry LLC had landed a contract to supply steel pipes for the 290 kilometre multi-product fuel pipeline project that will link the Sultanate’s two refineries in Muscat and Sohar, as well as a new national fuel storage hub planned at Al Jifnain.
Orpic is spearheading the development of the Muscat-Sohar Pipeline Project (MSPP). Orpic Logistics Company, a joint venture established by Orpic in partnership with Spanish fuel transportation and storage specialist CLH, is investing around $320 million in the implementation of the strategically important project, which is key to strengthening the nation’s fuel logistics infrastructure.
The MSPP Project will connect Orpic’s Mina al Fahal and Sohar refineries by means of a pipeline to the Al Jifnain intermediate distribution and storage facility in the Wilayat of Seeb, as well as a new storage facility at Muscat International Airport, which will receive aviation fuel directly from the pipeline.

When completed by around mid-2017, the Muscat-Sohar Pipeline Project will ensure the timely availability of refined products across the country against the rising trend in domestic demand growth. It will also contribute to a dramatic reduction in the number of fuel tanker trucks — blamed for traffic congestion — currently plying between Sohar and Muscat.

Orpic may be a relatively new name, but is making a huge mark on the petrochemicals industry in the Middle East and beyond.