The two leading regional energy groups, Oman Oil Company and Kuwait Petroleum International, signed a $4.61 billion project.

They aim to finance the construction of a 230,000 bpd refinery project. It will be located in the Special Economic Zone in Duqm (SEZAD) along the south-east coast of the sultanate.

The Duqm Refinery Project includes the development, construction and operation of the refinery, on-site utilities, infrastructure and storage facilities. Besides, it covers the development of crude tank storage facilities in Raz Markaz, an 80-km crude oil pipeline to the refinery and a product export terminal at the Port of Duqm.

The refinery is intended to process a range of blended crude oils and is configured as a full-conversion hydrocracker/coking facility. Thus it will utilise advanced technology supplied by leading technology licensors.

29 financial institutions from 13 countries will be funding the Duqm Refinery Project. Thus, it happens to be the most substantial project in the Sultanate. Three major Export Credit Agencies is to provide insurance and guarantees (cover). The engineering, procurement and construction of the project will be done by the world-class contractors under three lumpsum turnkey contracts.

The project comprises of an international commercial facility, an onshore commercial and an Islamic facility besides a United Kingdom (UKEF)-covered, a Spanish (CESCE)-covered, a South Korean (K-EXIM) covered facilities along with a K-EXIM direct facility, said the report.

The Duqm project is the first major cross-border refinery project in the Middle East region. In addition, it is the first joint venture in the region between government-owned oil companies of two Middle East countries.

Furthermore, this is the first Middle East refinery to process crude from another Middle Eastern country on a long-term contractual basis.