DMEA: Zarqa expansion and Duqm update

This week’s DMEA covers the submission of bids for the expansion of Jordan’s sole refinery and an update on the timeline for Oman’s Duqm refinery.

Jordan Petroleum Refinery Co. (JoPetrol) this week announced that it had received bids from engineering firms for a contract to expand the country’s Zarqa refinery under the so-called Project Petra.

The company said that it had received bids from “three consortiums comprising seven major Korean, Chinese, Japanese, Italian, Spanish and English companies”.

The project is intended to raise capacity at the 100,000 barrel per day facility by around 20,000 bpd and is expected to cost in excess of $2.6bn, with bids consisting of technical offers, financing offers and a financial offer.

JoPetrol invited the companies to bid for the work in January and the company has already begun the evaluation of technical offers before moving on to the financial terms which are expected to involve export credit agencies.

The expansion is also intended to improve the environmental performance of Zarqa, lowering fuel oil production and increasing that of gasoil, jet fuel and gasoline and catering to around 90% of the Kingdom’s demand.

In 2017, JoPetrol hired Honeywell and KBR for engineering work on Project Petra, which was at that time expected to cost around $1.6bn.

Oman’s flagship Duqm refinery is now on course for commissioning during the first quarter of 2023, with project completion now having reached 87%.

The update was provided in an interview with Oman News Agency by Yousuf Al-Jahdhami, head of project management at OQ8, a 50:50 joint venture between OQ and Kuwait Petroleum International (KPI).

The $8bn, 230,000 bpd facility had been anticipated to come on stream during 2022, but the timeline has been further extended owing to delays caused by coronavirus (COVID-19).

Upon completion, 65% of its feedstock will be provided by Kuwait, with local production delivering the balance.

When it comes into operation, the refinery will produce diesel, jet fuel, naphtha and LPG, and will feature units for hydrocracking, hydrotreating, delayed coking, sulphur recovery, hydrogen generation and Merox treating.

Meanwhile, it will use up to 30,000 bpd of heavy crude oil to produce 1mn tonnes per year of bitumen, as well as 600,000 tpy of naphtha, distillates and vacuum gas oil.