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Oman mulls bank proposals to build refinery

MUSCAT - The Omani government is considering financial proposals from 23 international and regional banks for a $1 billion loan package to build a refinery in the northeast city of Sohar.

A project official said the banks included Apicorp, ABN Amro, Barclays, Bank Muscat, City Bank, Emirates Bank, WestLB and KfW.

"We expect to award the financial contract to the selected banks by the end of this year," the official said.

Work on the refinery is expected to start during the first quarter of 2004 for the production to start in the third quarter of 2006. Earlier this year, Japanese engineering firm JGC Corp had won an $880 million contract to build the state-owned Sohar oil refinery located 250 km from the capital Muscat. Facilities in the refinery include a 75,000 barrels-per-day crude distillation unit and secondary units such as one for gasoline desulphurization and another to produce liquefied petroleum gas (LPG).

The government had also tendered for a contract to build a pipeline from the existing Oman Refinery Company in Muscat to carry crude oil to feed the planned refinery at Sohar. The pipeline will be able to transport up to 100,000 barrels per day of mixture of crude oil and long residue as a feedstock to the Sohar Refinery. Government officials said the construction of the pipeline was expected to cost around $175 million.