oil and gas

OQ inaugurates RO318mn LPG plant

January 17, 2022

Muscat – OQ, the global integrated energy group of the country, inaugurated its state-of-the-art liquefied petroleum gas (LPG) plant worth RO318mn in Salalah on Sunday. The plant processes natural gas liquids (NGLs) extracted from gas networks into LPG.

Sayyid Theyazin bin Haitham al Said, Minister of Culture, Sports and Youth, presided over the commissioning ceremony that was attended by members of the Royal Family, ministers, undersecretaries and other dignitaries.

Built with an investment of RO318mn, OQ’s LPG plant embodies the government’s strategy to drive economic diversification, optimise value creation from the country’s natural resources, promote in-country value (ICV) development, and implement Oman Vision 2040 to diversify revenue generation streams.

During the ceremony, Sayyid Theyazin was given an overview of the various key components of the plant, which have been designed and built in accordance with the highest technical and safety standards. It includes an extraction facility, fractionation unit, storage tanks, shipping facilities, and a pipeline system that connects the plant with the extraction unit at the upstream end of the project, with the storage components and export facilities located at Port of Salalah.

“These national projects in the petrochemical sector carried out by Oman Investment Authority through OQ Group support the national economy and reflect the aspirations of the government of His Majesty Sultan Haitham bin Tarik to promote the economic diversification efforts in the country in line with Oman Vision 2040,” Sayyid Theyazin said.

“We would like to commend the success in commissioning OQ’s LPG plant in Dhofar and its high level of operational efficiency. The plant, which is run by young Omani cadres, reflects the efforts exerted by OQ to make the optimal use of natural resources, maximise its benefits and promote downstream industries. This will support the various economic activities related to the energy sector, particularly the small and medium enterprises.”

On the occasion, Talal bin Hamed al Oufi, CEO of OQ Group, said, “The plant is made to the highest standards and will help economic diversity in Dhofar as well as the country as part of Oman Vision 2040. As one of the most important projects to improve gas services of the region, the plant will ensure self sufficiency. We started exporting in July last year. The plant has also helped the local economy and SMEs.

“The launch of the project will further reinforce Oman’s position as a leading producer and exporter of LPG, among a host of other refined petroleum products and petrochemicals. OQ LPG will also meet the energy requirements of local industrial and retail consumers. Furthermore, the group is studying the feasibility of using LPG products to develop petrochemical industries to help optimise value creation. The LPG plant is designed and built to the highest technical and safety standards. It consists of a number of components, notably a facility for the extraction of rich gas elements such as propane, butane and condensates from natural gas, as well as a fractionation plant, storage tanks, shipping facilities, and an interconnection pipeline system.”

Oufi said that the OQ LPG plant in Salalah is one of the most important projects of Oman Investment Authority. It will contribute to improving the gas value chain in general, providing liquefied petroleum gas and exporting surplus production and some of its derivatives to global markets.

He added that the establishment of such projects in various governorates contributes to promoting economic and social development in the different regions of the country, while advancing the growth of the industrial sector. “The project, from inception, has sought to enhance ICV development in the gas sector by retaining a sizable part of the expenditure within the country. Accordingly, it contributed to developing human capabilities and strengthening the national economy,” Oufi said.

“The plant paid great attention to creating job opportunities and honing the skills of young Omanis. Total expenditure as part of ICV development reached more than RO96mn. Around 300 small and medium enterprises took part in the implementation of the plant during the procurement and construction phase.”

OQ LPG has a capacity to process around 8.8mn standard m3 per day of lean gas to produce about 304 kilotonnes per year of LPG, comprising 155 kilotonnes per year of propane (C3), 111 kilotonnes of butane (C4) and 38 kilotonnes of condensates (C5+).

The plant will also meet the energy requirements of industrial and retail consumers in Dhofar. Surplus output will be exported to world markets through OQ Trading, the marketing arm of the group. The group is studying the feasibility of using LPG products to develop petrochemical industries to help optimise value creation from hydrocarbons and support downstream investment.


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