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Cover Story: Globally competitive: Omani downstream business

by Martin Menachery on Mar 26, 2018

Ahmed Saleh Al Jahdhami, CEO, Orpic.
Ahmed Saleh Al Jahdhami, CEO, Orpic.

Orpic's mission is to sustainably and consistently maximise the value for its stakeholders, as their partner of choice, declares Ahmed Saleh Al Jahdhami, CEO, Orpic.

Oman Oil Refineries and Petroleum Industries Company (Orpic) is one of the largest organisations in the Sultanate of Oman and one among the most rapidly growing businesses in the Middle East downstream oil and gas industry.

The company’s refineries in Sohar and Muscat, as well as the integrated aromatics and polypropylene plants in Sohar, provide fuel, chemicals, plastics, and other petroleum products, to the Sultanate and to the world. With an annual revenue exceeding $10bn, Orpic is a multicultural organisation with a total work force of around 2,800 people from 40 countries.

Orpic’s investments impact Oman’s economy in various ways. A direct impact is via business operations and strategic growth projects that influence the GDP through the payment of profits and salaries, and job opportunities for individuals, including direct, indirect and induced employment.

The indirect impact would be via supply of goods and services such as raw materials, and employment of local vendors and suppliers. Economic stimulation is another effect, with employees spending their salary on consumer goods and services, which generates further employment in the retail sector.

Since 2011, Orpic has embarked on a bold and ambitious strategic growth plan with a key focus to position the company as one of the prime petrochemical players across the global map. As of today, Orpic has already achieved this aspiration in a span of seven years through an integrated petrochemical complex that Oman is proud of. Yet, there is a lot of work that needs to be done to sustain the strategic growth of the company as well as to fulfil its promise and commitment to the Sultanate.

Orpic appointed Ahmed Saleh Al Jahdhami as its CEO on 1 January 2017. Al Jahdhami is spearheading an ambitious growth plan for Orpic over the next five years, which will increase its asset base by over $9bn and its product portfolio by more than four million tonnes/year of fuels and plastics.

To continue to meet the needs of Oman, and the international markets, Orpic undertook three strategic growth projects – Sohar Refinery Improvement Project (SRIP), Muscat Sohar Product Pipeline (MSPP) and Liwa Plastics Industries Complex (LPIC), in line with the company’s strategy to add value to the oil and gas resources of Oman. And, Orpic will be establishing offices in China, Singapore and India as part of its plan to be a globally competitive business and service its customers by being closer to them.

Sohar Refinery Improvement Project

SRIP is a multibillion-dollar capital investment, which has already started its commissioning activities. The project is delivered in response to the need to upgrade the company’s refining capability in order to further maximise the value of Omani crude oil.

“With SRIP, the Sohar refinery will add 82,000 barrels per day (bpd) to its existing capacity of 116,000bpd – taking the total capacity to 198,000bpd. This indicates a 70% growth in fuel production – 90% for diesel, 37% for gasoline, 93% for kerosene, 93% for jet fuel, 91% for LPG, 175% for naphtha, and 44% for propylene,” says Al Jahdhami.

“Sohar Refinery Improvement Project will also ensure the ability to meet the increasing demand for oil and refined products, supporting the economic development of the Sultanate. Within the company’s operations, the level of integration will be raised significantly with the feedstock needs of its aromatics and polypropylene plants being met from Sohar. With the increased supply of naphtha, Orpic will be able to reduce naphtha purchases from 75% of its total requirement to 25%.”

Muscat Sohar Product Pipeline

Orpic marked the beginning of its commercial operations at the MSPP project in October 2017. This $320mn investment is one of the company’s strategic growth projects which will deliver more than 50% of Oman’s fuel via the state-of-the-art storage facility.

The fuels are currently supplied by a pipeline to the terminal from Orpic’s Sohar refinery. The Al Jifnain terminal will serve as new hub for fuel supply to local marketing companies. The terminal will start to commercially supply aviation fuel through a direct pipeline to support the requirement of Muscat International Airport.

“In addition to meeting the domestic future demand for fuels, this project will increase the sufficiency of the fuel storage, and reduce pollution as a result of 70% lower truck movement in Muscat,” Al Jahdhami observes.

“This is a first of its kind project to be constructed in Oman – removing the need for Orpic to ship refined products, and bringing a new level of efficiency and lower cost to its business. The project will also be equipped with loading facilities designed to cater to the loading of more than 500 trucks per day.”


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