LPG extraction project approved in Oman

Plans for Oman’s first $826m LPG extraction plant have been green lit, according to reports.

The important project is being developed by Oman Gas Company SAOC (OGC), part of the government’s energy and strategic investment arm Oman Oil Company SAOC (OOC), at a site located within Salalah Free Zone.
Revenues from the venture, based on an output of around 300,000 tonnes of LPG, is estimated at $200m per annum.

The extraction and fractionation plant will be designed to process up to 8.8 million standard cubic metres/day of natural gas.

Also, LPG and condensate storage facilities will be developed on a nine-hectare site at the adjoining Port of Salalah. LPG will then be exported from there to the Indian sub-continent, when the development

From this dedicated export jetty, LPG will be shipped to markets primarily in the Indian sub-continent — a task handed to OOC’s international trading arm Oman Trading International (OTI) — when the Salalah LPG project is operational by the year 2020.


Isam al Zadjali, chief executive of OOC, told the Oman Daily Observer said: “Salalah LPG is a strategic investment for OOC as it supports the long-term objectives of the Government of the Sultanate of Oman in terms of revenue generation, economic development and job creation through monetisation of the propane and butane elements of available rich gas. Salalah LPG will generate significant financial benefit for the government of Oman and OOC, and will further enhance the existing and future downstream industries in Dhofar Governorate.”

Sultan bin Hamed al Burtmani, of OGC, added: “Salalah LPG has been able to successfully secure limited recourse financing amid challenging global financial and economic conditions. This reflects the trust that financing institutions have placed on the project and the financing structure. The robustness of Salalah LPG’s financing structure is demonstrated by the fact that the lending group comprises of local, regional as well as international lenders.”