Sohar: The Oman government has started importing diesel and petrol to meet the growing local demand, which the country's two refineries are unable to meet.
The import will continue for another two to three years until Sohar refinery's 60,000 barrels per day (bpd)-expansion goes on stream, expected to be ready by 2016, said a top-level official of the state-owned Oman Refineries and Petroleum Industries Company (Orpic).
Presently, Sohar and Mina Al Fahal refineries in Muscat, both owned by Orpic, have a combined capacity of 222,000 bpd, including Sohar refinery's 116,000 bpd capacity.
But the local demand for petroleum products is growing at a fast pace of 10-15 per cent per annum, which the refineries are unable to cope with.
"This year, we started importing fuels to cover the shortage in case of both refineries to meet the total national demand," Orpic chief executive officer Musab Al Mahruqi told newspersons while briefing the media about the commissioning of the Sohar Refinery's Wet Gas Scrubber unit that significantly reduces the amount of sulfur dioxide emissions.
"This shortage will continue to increase year after year for the next two to three years."
Al Mahruqi said the growth in the demand for diesel and gasoline was in the range of 10-15 per cent per annum between 2006 and 2012. "We had doubled our consumption during the period," he noted.
He said there were no imports in 2011 as both the refineries were working at full capacity. "However, even if both refineries work at their full capacity, we will not be able to meet the growing demand. We will be importing petroleum products in small quantities on behalf of the government in 2013, 2014 and 2015," the Orpic chief said, adding, "The quantity may increase due to the growth in demand. However, we will maintain at least 80-85 per cent of the production from the refineries." Al Mahruqi also said that the Sohar Refinery's improvement programme, which will take the crude processing capacity to 176,000 bpd, is a strategically important project not only for the Orpic but also for the country as a whole.
"We are in the final stage of evaluation to select an engineering, procurement and construction (EPC) contractor for the project and hope that it will be awarded shortly."
Six major international engineering companies have submitted their bids and South Korea's Samsung Engineering Co turned out to be the lowest bidder with its OMR728 million quotation when the Tender Board opened the bids last week.
Al Mahruqi also noted that the Sohar Refinery improvement project is strategically important for the country since Oman crude quality continues to change and therefore, the refinery has to be upgraded to deal with that change.
"Otherwise, the performance of the refinery will deteriorate in the coming years. It also means that there will be further environmental challenges to manage," Al Mahruqi added.