May 03, 2021

Liquified Petroleum Gas Facility in Dhofar Commissioned

Press release

OQ announced today the commissioning of one of Oman’s vital energy extraction projects, the OQ Liquified Petroleum Gas (OQ LPG) facility. Built with a total investment of USD 826 million, OQ LPG is first of its kind gas treatment project in Oman to extract LPG and condensate from OQ’s Gas network.

With its centerpiece extraction facilities located in the Salalah Free Zone adjoining the Port of Salalah, OQ LPG has the potential to create a new energy hub in Salalah centering on the production of LPG (Liquefied Petroleum Gas), a commercially valuable and economically competitive fuel with growing demand in domestic and international markets. While reiterating the position of Oman as an energy exporter, it will optimize the Sultanate’s gas value chain by recovering propane, butane and condensate for these markets.

The facility, built as per the highest standards in safety, quality, and technical integrity, consists of an extraction plant, a fractionation facility, storage tanks, shipping facilities, and an interconnection pipeline system. The plant will process approximately 8.0 million Standard Cubic Meters per Day (Sm3/d) of Lean gas and will produce around 304 kilo tons per annum (KTA) of LPG products composed of 155 KTA of Propane (C3), 111 KTA of Butane (C4), and 38 KTA of Condensate (C5+).

Marking this important milestone, Sultan bin Ali Al Burtumani, VP Business Development OQ Downstream, stated “OQ LPG plant is positioned as a strong contributor to national economy through achieving the best utilization of natural gas resources to extract liquified gas, this will help in meeting the LPG needs of Dhofar governorate and southern Oman in general. OQ LPG will further uplift our standards to provide better quality services for our clients and optimize stakeholder value. OQ is joining hands with Ministry of Energy and Minirals to maximize the extraction of NGLs, “the richer molecules within the natural” for petrochemical industries developments”.

OQ LPG plant’s production is expected to reach a total of 300,000 MT per annum. The plant holds immense potential in terms of revenue generation, In-Country Value (ICV) and community development. Besides deriving economic value through propane, butane and condensate sales, the plant will generate potential downstream business such as petrochemicals.

During all its phases, the project has been promoting ICV in the gas sector as the project spent USD 260 million of ICV value, with over 150 SMEs, 33 sub-contracts and Omani registered vendors.

OQ LPG had several CSR initiatives in Dhofar including supply of medical equipment to community hospitals and building community schools.

The commissioning of OQ LPG which is expected to be completed by mid May 2021 forms the final technical requirement before the Plant starts the commercial operations. The project team recently celebrated the production of the first on-spec product which is considered as one of the milestones during commissioning phase.

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