oil and gas

$826m LPG project begins trial operation in Salalah

May 4, 2021

Value creation: Strategically vital plant produces 304 kilotons per year of LPG products, consisting of 155 kilotons of propane, 111 kilotons of butane and 38 kilotons of condensate.

MUSCAT, MAY 3 - Oman’s first liquefied petroleum gas (LPG) extraction plant has commenced trial production at Salalah Free Zone in Dhofar Governorate.

OQ LPG, a subsidiary OQ Gas Networks (part of OQ Group – the Sultanate’s integrated global energy group) was set up with an investment of around $826 million. The strategically important venture has been designed to further unlock the economic and commercial potential of the Sultanate’s hydrocarbon resources.

The centerpiece of the project is an extraction and fractionation plant designed to process up to 8.8 million standard cubic metres/day of natural gas. While the rich gas elements, comprising a mix of propane, butane and condensates, are stripped from natural gas to produce LPG, the ‘lean gas’ is pumped back into the grid. Total output of LPG is estimated at about 304 kilotons per year, consisting of 155 kilotons per year of propane, 111 kilotons of butane and 38 kilotons of condensate.

Also as part of the project, LPG and condensate storage facilities have been developed on a roughly 9-hectare site at the adjoining Port of Salalah. From this dedicated export jetty, LPG can be shipped to markets primarily in the Indian sub-continent.

OQ LPG (formerly known as Salalah LPG) has been described as a strategic investment for OQ as it supports the long term objectives of the Government of the Sultanate of Oman in terms of revenue generation, economic development and job creation through monetisation of the propane and butane elements of available rich gas.

OQ LPG will generate significant financial benefit for the government of Oman and OQ, and its local community and will further enhance the existing and future downstream industries in Dhofar Governorate.


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