Omani-Kuwaiti joint venture Duqm Refinery & Petrochemical Industries Company (DRPIC) has announced the suspension of front-end engineering and design (feed) work on its proposed Duqm Petrochemicals project in the sultanate.
In a statement on 3 November, DRPIC said it is seeking to assess the impact of Covid-19 on the estimated $7bn project, as well as on the company’s business.
DRPIC is a 50:50 joint venture of state energy companies Oman Oil Company (OOC), now a subsidiary of state energy holding company OQ, and Kuwait Petroleum International (KPI).
DRPIC’s board of directors concluded that “the suspension of feed work on the project is in the interest of the company during a time of unprecedented global economic uncertainty due to the impact of the Covid-19 pandemic, depressed demand and highly volatile commodity prices”.
“The shareholders intend to reassess the project, taking into account the current challenging global market environment and the importance of seeking opportunities to enhance the value of the project,” a statement carried by Oman News Agency said.
MEED previously reported that UK engineering firm Wood Group was performing the feed works on the Duqm Petrochemicals project. Australian firm Worley is the project management consultant (PMC) supporting Wood during the feed phase.
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DRPIC’s shareholders had intended to reach the final investment decision on the project in 2021, with the complex scheduled to be commissioned in 2025.
In late September, MEED reported that contractors had submitted documents for the first stage of the prequalification (PQ) process for the engineering, procurement and construction (EPC) works on the Duqm Petrochemicals project.
The PQ exercise was planned as a two-stage process, with DRPIC issuing the PQ tender to about three dozen contractors on 15 September.
The original plan for the Duqm Petrochemicals project sees it centred on a mixed-feed steam cracker with a capacity to produce 1.6 million tonnes a year (t/y) of ethylene.
The planned project comprises a polypropylene (PP) plant, with a capacity of 280,000 t/y, and a high-density polyethylene (HDPE) plant, with an output potential of 480,000 t/y.
The Duqm Petrochemicals complex will also include an aromatics plant and a polypropylene plant, as well as storage facilities for naphtha and liquefied petroleum gas.
Meanwhile, DRPIC also announced on 3 November that EPC works on its estimated $7bn Duqm Refinery project were continuing as per schedule, with overall progress standing at 72%.
This article is published by MEED, the world’s leading source of business intelligence about the Middle East. MEED provides exclusive news, data and analysis on the Middle East every day. For access to MEED’s Middle East business intelligence, subscribe here.