Orpic Logistics Company (OLC), a joint venture between Oman Oil Refineries and Petroleum Industries (Orpic) and the Spanish firm Compañía Logística de Hidrocarburos (CLH), held in Muscat on Tuesday 16 December a signing ceremony for the EPC contract and the financing agreement of its Muscat Sohar Product Pipeline project (MSPP). The Oman based GPS Company will be the lead contractor in the EPC contract and it will be supported by Abantia, a Spanish Construction company, which is experienced in terminal construction, and Diseprosa, an engineering company based in Spain. The financing agreement which will cover 70% of the project value has been given to Ahli Bank SAOG and Ahli United Bank B.S.C.

The EPC contract and financing agreement were signed on behalf of Orpic Logistics Company by Musab AL Mahruqi, Chairman of OLC, and Salvador Guillén, Managing Director of the CLH Group and a board member of OLC, and on behalf of GPS the EPC contract was signed by its General Manager N.Vahora. The financing was signed on behalf of the Ahli Bank SAOG by its CEO Lloyd Maddock, CB Ganesh: Deputy CEO, Prakash Mohan- Group Head- Corporate Banking from Ahli United Bank Bahrain, and Shyam Sunder, Team Leader, Energy & Utility from Ahli United Bank.

The ceremony was held in Orpic’s Mina Al Fahal Refinery and attended by His Excellency Salim bin Nasser Al Aufi, Undersecretary of the Ministry of Oil and Gas, His Excellency Juan-Jose Urtasun, Spanish Ambassador to the Sultanate of Oman, and the Chairman of the CLH Group, José Luis López de Silanes.

During his speech in the signing ceremony Musab Al Mahruqi said: “the MSPP project is of paramount importance to the Sultanate as it will help satisfying the growing domestic demand for fuels which is 7% per annum, it will guarantee a timely availability of products without shortage, and after its commissioning 50% of country’s demand will be met from the new storage facility of the project.”

He added that: “the MSPP project will provide highly safe and environmental friendly transportation of petroleum products across the country, it will help save energy with very minimum fuel loss, and it will reduce truck traffic.”

Additionally, during their speeches, the Chairman of the CLH Group, José Luis Lopez de Silanes, said: “It is an honor for CLH that Orpic has chosen us to participate in such an important operation, which will bring significant advantages to this country and will mean the transformation of its oil product logistics model into a more efficient, safe and environmentally-friendly one”; and the Managing Director of the CLH Group, Salvador Guillén, remarked that “the ambitious objectives associated to the MSPP Project can be achieved if we continue working with the same degree of commitment and effort that we have employed to date. At this point, I would like to highlight the professional attitude shown by the OLC team and the dedication of its Board members”.

The MSPP Project will be a two-way multi-product pipeline, the first of its kind to be constructed in Oman. The project estimated cost is USD 320 million. The new pipeline network will eliminate the need for Orpic to ship and truck refined products. Not only will it bring a new level of efficiency and lower costs to its business, it will reduce the number of fuel-tank truck journeys in and around Muscat. Heavy fuel-tank truck traffic in Muscat is expected to drop by 70%. The MSPP Project will connect Orpic’s Mina Al Fahal and Sohar refineries by means of a 280 km pipeline to an intermediate distribution and storage facility at Jifnain 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. The pipeline is split into three sections: MAF-Seeb Terminal: 42 KM (10 inches), Seeb Terminal-Airport: 27 KM (10 inches), and Sohar-Seeb Terminal: 228 KM (18 inches).

The construction of the pipeline and oil tanks facility will start in the first quarter of 2015 and the project is due to be commissioned in the second quarter of 2017. The project will constitute of a state of the art control systems with latest technology of SCADA, leak detection, and telecommunication network and it will equipped with loading facilities for trucks filling that is designed to load 200 trucks per day.