Oman to inaugurate $7bn Liwa Plastics project next week

Market: Oil products, Petrochemicals
12/12/21

Oman's state-owned OQ today said it will inaugurate its 2.7bn Omani riyal ($7.05bn) Liwa Plastics Industrial Complex (LPIC) on 20 December, around one and a half years after announcing the start of commissioning in May 2020.

"The Liwa Plastic Industries Complex is the largest manufacturing project in the Sultanate of Oman," OQ's acting chief executive for Refining and Petrochemicals Kamil bin Bakheet al-Shanfari said today. "The polymer products will cover the local and international markets."

The project consists of four packages, three of which have already reached commercial operation. The integrated commercial operation of the fourth and final package — package 1 — is due to reach full production in the first quarter of 2022. LPIC was supposed to fully commence commercial operations by the third quarter of this year.

At full capacity the project will add 838,000t/yr of polyethylene (PE) and about 215,000t/yr of polypropylene (PP), raising total production of both products in the country to 1.4mn t/yr from around 1mn t/yr, al-Shanfari said.

The project, which had originally been scheduled to come on stream in 2018 represents a big part of the government's plans to diversify its economy away from oil and gas exports and boost its manufacturing sector through investment in petrochemical projects.

LPIC, located in Sohar port, comprises a 1.04mn t/yr NGL extraction plant in Fahud, a 300km pipeline from Fahud to Sohar, a steam cracking unit, and polymer plants. The steam cracker allowed for the production of PE for the first time in Oman after the 880,000 t/yr swing PE plant started up in May last year. It also includes a 300,000 t/yr PP unit.

The project's cost has been progressively growing since its inception almost ten years ago. Oman in 2013 initially expected the project cost to stand at around $3.6bn. But this soon rose to $5.2bn by September 2015 and later to $6.4bn in July 2017.Oman had put the project cost at $6.7bn as recently as May 2020.

LPIC will enable OQ to utilize products from its refineries and its aromatic plant as feedstock for more valuable, higher-margin products. The project will also produce by-products that will be fed-back into the company's refineries and aromatics complex.

By Sarah Raffoul

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