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Orpic to award Liwa Plastics contracts in Q4 this year

Orpic will provide US$1.2bn for the planned project and the remaining US$4bn will come from international financial institutions. (Image source: Mick Garratt/Wikimedia Commons)

Oman?s Oil Refineries and Petroleum Industries Company (Orpic) will award four contracts for building the US$5.2bn Liwa Plastics Industries complex in Q4 this year

The state-owned company?s CEO, Musab Al Mahruqi, told journalists that four engineering, procurement and construction (EPC) packages will be awarded.

?We are due to receive financial bids starting from next week until the end of the month. By the end of September, we will open financial bids of Liwa Plastics project. We plan to award it in the fourth quarter of this year,? said Al Mahruqi.

Orpic has received technical bids from several global contracting firms for developing the mega petrochemical project with a total capital expenditure of US$5.2bn. The development programme is divided into four major parts; a polymers plant in Sohar industrial area; a natural gas liquids extraction plant in Fahud; a steam cracker plant; and a 300 km pipeline from Fahud to Sohar.

The company will provide US$1.2bn for the project and the rest of the funding, of US$4bn, will come from international financial institutions. Orpic is aiming to sign financing agreements concurrently with the award of the EPC contracts, and has already started negotiations with export credit agencies earlier this year.

?We will be able to secure finance on time for us to award the contract to EPC contractors,? said Nazar Al Lawati, chief financial officer of Orpic. With over 40 financial institutions taking part in the process, this will be the largest project finance in Oman.

Liwa Plastics Industries is expected to go on stream by 2018, and will produce polyethylene, polypropylene and butene. It will be the first time that Oman will produce polyethylene. It will also be the first natural gas extraction project to produce high value petrochemical products in the country. Marketing of the company?s products will also be done entirely by Orpic for the first time, instead of using a third party marketer.