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Oman's Duqm refinery on track to run above capacity

Oman's Duqm refinery on track to run above capacity

Dubai, 3 July (Argus) — Oman's 230,000 b/d Duqm refinery is looking to operate at 10pc above nameplate capacity and is considering diversifying its product portfolio, according to its operator. Omani-Kuwaiti joint venture OQ8's chief executive David Bird told Argus the capacity expansion would be pursued in the near term, with some already opening up in coking and hydrocracker units. The 10pc crude capacity increase is "my COO's [key performance indicator] for this year and I think we all have very high confidence that we'll be able to sweat the assets further," Bird said. "We may even look at intermediate feedstocks and bring in VGOs and residues in order to load up these two conversion units." The $9bn refinery, which hit capacity in February, uses feedstock comprised of 65pc Kuwaiti crude and 35pc Omani crude. Bird said Duqm may add new products to its existing, middle distillates-focused, output of jet fuel, gasoil, naphtha and LPG. "We are looking at structuring, doing something with naphtha," he said. "We are evaluating either reformate or gasoline, which have already gone through feasibility and are now under stage-gate review to decide if we should pursue those investment decisions." Bird also pointed to possibilities in base oils, which he said will be needed "as long as things are moving." "The Middle East has a unique opportunity to capitalize on Group I and Group III base oils," he said, noting Duqm's proximity to growing demand markets in Africa. "If Duqm was to look at expanding capacity, which definitely would still be in middle-distillate oriented space, we would talk about another hydrocracker that might be orientated towards base oil," Bird said. Oman is also developing a petrochemical complex with Saudi Arabia's Sabic and Kuwaiti state-owned KPI, which will use some of the Duqm refinery's production as feedstock. Feasibility for the project has concluded and has been "intimately evaluated" along with a naphtha upgrade, and Bird described them as "very complimentary." Close eye on Europe Bird said that while there is a "huge thirst of our products right at our doorstep", Duqm cargoes are finding their way to destinations that were not previously envisaged. Around 45pc of Duqm's diesel goes to east Africa, but loadings for Europe have begun more recently. Duqm can make European grade winter-specification diesel and is on track to capitalise on demand during the switch from summer grade this year. "When it comes to winter-spec diesel, if the arbitrage opens we can supply that competitively versus anyone else," Bird said. "So we always have an eye on Europe but we're also going to make sure that we are active in markets that are closer to home." By Rithika Krishna Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.