OQ8’s Duqm Refinery: How the Cross-Border Milestone will Transform the Middle East Oil Industry
08.19.2023 By Tank Terminals - NEWS

August 19, 2023 [Oil & Gas]- Significant progress has been made in the project’s execution, with the start-up phase of the refinery now completed.

 

Guided by a vision to build a globally recognised world-class refinery business fuelling prosperity for Oman, Kuwait and the region, Duqm Refinery and Petrochemical Industries Company (OQ8) is set to revolutionise the oil and gas industry in the GCC. The joint venture between Oman’s OQ Group and Kuwait’s Kuwait Petroleum International (Q8), the largest collaboration of its kind between GCC countries, is making strides to launch the Duqm Refinery’s commercial operations by the end of 2023.

Located in the Special Economic Zone at Duqm, OQ8 leverages its strategic location and advanced hydrocarbon cracking and coking technologies to supply superior and competitive refined oil products, catering to regional and global demand. With significant progress achieved and a strong commitment to social responsibility and talent empowerment, OQ8 is driving regional cooperation, economic growth, and a sustainable energy future.

OQ8 comprises three main packages, all specifically designed to produce a wide array of high-quality oil derivatives including diesel, jet fuel, naphtha, liquefied petroleum gas, sulphur, and petcoke. The first package is comprised of the main processing units, which form the core of the refinery. The second package includes supporting facilities and services. The third and final package encompasses liquid and bulk storage and export facilities in the Port of Duqm, as well as OTTCO-managed crude oil storage facilities in Ras Markaz.

Significant progress has been made in the project’s execution, with the start-up phase of the refinery now completed, marked by the production of high sulphur fuel oil (HSFO) – the first shipment of which has already been exported to the USA – and naphtha. Additionally, Omani and Kuwaiti crude oil has been successfully shipped to Ras Markaz and subsequently pumped to the refinery complex in Duqm via pipelines extending 80 kilometres, further showcasing the collaborative relationship between OQ8 and OTTCO.

Rigorous Readiness Measures

OQ8 is rapidly approaching commercial operation, with over 98% of the project’s construction and 65% of the commissioning process completed, signifying the dedication and effort invested in bringing the project to fruition. As OQ8 prepares for the next phase in its operations, a comprehensive readiness verification process is underway. This process includes thorough examinations of security and safety procedures, as well as the assessment of mechanical and electrical systems’ readiness. The successful start-up of the refinery’s support units, which are now qualified to provide all necessary services, further strengthens the project’s readiness to pump crude oil into the refining units.

Harnessing Strategic Location

OQ8’s unique location in the Special Economic Zone at Duqm, overlooking the Arabian Sea and the Indian Ocean, positions it as a key player in the region’s energy landscape. The project capitalises on Oman’s strategic geographic location, which serves as a gateway to various continents and regional and global markets, allowing it to cater to the increasing energy demands of North-eastern Europe, East Africa, and the Far East.
As the first cross-border refining investment in the Middle East, OQ8 signifies a milestone in regional cooperation. The project enables the refining of crude oil extracted from different countries in the Sultanate of Oman, reinforcing the economic integration and collaboration between Oman and Kuwait. This pioneering approach underscores the project’s significance in fostering bilateral relations and driving economic growth.

OQ8’s Strong Commitment to ICV and Local Development

Since its establishment, OQ8 has repeatedly demonstrated its unwavering commitment to optimising its ICV and promoting local development and social responsibility. A key aspect of this commitment is the allocation of 10% of the project’s construction work to small and medium-sized enterprises (SMEs), with a particular focus on those operating in the Al Wusta governorate.

As part of its robust ICV strategy, companies tasked with executing the refinery’s three packages are obligated to allocate 20% of the project’s net purchase value to locally manufactured materials and local suppliers. This approach has played a crucial role in stimulating economic growth, with over $2 billion already allocated to local businesses and suppliers.

Furthermore, OQ8 has prioritised talent development, committing to nurturing capable national cadres and equipping them with the capabilities required to become an integral part of its success. Initiatives such as “The Science of a Refinery” program and English language competency enhancement programs, in collaboration with the British Council, aim to inspire students, equip them with essential skills and ensure their seamless integration into the job market.

OQ8 CEO, David Bird, expressed his pride in the refinery’s progress so far: “It is an honour to be a part of OQ8’s journey, which exemplifies the ambition and determination of Oman and Kuwait. We have worked tirelessly alongside our valued partners to bring this transformative project to life, and we eagerly look forward to even more ground-breaking accomplishments.”

“As we approach the launch of commercial operations, we remain dedicated to making a positive impact on the economies of Oman and Kuwait through the provision of affordable energy sources, creation of job opportunities and stimulation of regional cooperation,” Bird says.

He adds, “At OQ8, we are inspired by the vision shared by our nations, and we are confident that our efforts to bring about energy stability and support local communities are positioning our industry as a force for good, fuelling prosperity and building legacies.”

 

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