The two-way multi-product Muscat Sohar Product Pipeline (MSPP) is the first of its kind to be constructed in Oman and will help to satisfy the growing demand for fuels in the Sultanate. The region is of particular interest to the tank storage community as additional storage and refining capacity will grow the region as an oil hub in the global market. In an interview with Tank Storage Magazine, Andres Suarez, general manager at Orpic Logistics explains how the pipeline will add further value to Orpic and enable it to be a leading performer in its sector.
How will the MSPP improve the distribution of oil products to the region?
Orpic (Oman’s Oil Refineries and Petroleum Industries Company SAOC) was created to integrate the operations of Mina Al Fahal Refinery, Sohar Refinery, Aromatics Plant and Polypropylene Plant. It is one of Oman’s largest companies and one of the most rapidly growing businesses in the Middle East oil industry. Orpic’s refineries in Sohar and Muscat, as well as the Aromatics and Polypropylene Plants in Sohar, provide fuel, chemicals, plastics, and other petroleum products, to Oman and the world.
To achieve Orpic’s vision of building an Omani integrated refining and petrochemical business, the company has undertaken diversification and embarked upon three strategic projects – Sohar Refinery Improvement Project (SRIP), Muscat Sohar Product Pipeline (MSPP) and Liwa Plastics Industries Complex (LPIC). These project will grow our capacity to meet the needs of Oman and international markets.
Muscat Sohar Product Pipeline and Al Jifnain Terminal project will enable the connection of Orpic’s Mina Al Fahal (MAF) Refinery in Muscat and Sohar Refinery with a new storage and distribution terminal located in Jifnain via a bi-directional pipeline network. The pipeline network is split into three sections: MAF – Jifnain Terminal: 40 kms (10 inches), Jifnain Terminal – Muscat International Airport: 30 kms (10 inches), and Sohar – Jifnain Terminal: 220 kms (18 inches).
Apart from meeting the domestic demand for fuel, which is growing at approximately 5 to 10% per annum, this project will deliver numerous social, economic and environmental benefits.
What other benefits will come from the MSPP project?
Upon commissioning in 2017, the Al Jifnain Terminal will deliver more than 50% of Oman’s fuel via the storage facility. This is a first-of-its-kind project to be undertaken in Oman – removing the need for Orpic to ship refined products, and bringing a new level of efficiency and lower costs to its business. Due to the reduction in reliance on fuel-tank truck transportation, in and around Muscat, heavy fuel-tank truck traffic in Muscat is expected to drop by 70%. The project is being executed by Orpic Logistics, a joint venture between Orpic and Compañía Logística de Hidrocarburos (CLH). MSPP project will be the first of this kind in Oman.
How do you expect the demand for oil products to grow in the region?
Despite low prices of crude oil and refined products, that intuitively would represent an increase in the oil products demand, for the Sultanate of Oman, a country highly dependent on oil exports, this situation may slow down the growth of the economy and therefore the consumption of oil products. Further, the prices of oil products in Oman, regulated by the government, have been increased in the beginning of 2016 and this could also have an adverse effect on the consumption of oil products. Nevertheless, it is still too nascent to conclude that the demand is being affected.
Where will the demand for the pipeline come from regionally?
The products to be transported through the multiproduct pipeline network will come from Orpic’s two Refineries – Mina Al Fahal in Muscat and Sohar Refinery in Sohar. However, the existing refineries and the Sohar Refinery expansion to be commissioned by the end of 2016 will ensure that the oil products demand is covered by national production at least for the next five years. The MSPP project is the first investment of Orpic Logistics but opens the door for new projects that may include pipeline connectivity with neighboring countries to increase the security of supplying oil products within the region and to facilitate the export of these types of products.
How will MSPP improve terminal efficiency at Orpic Logistics?
The operation of Al Jifnain Terminal is based on highly automated processes which brings significant security to the logistics operations. The implementation of a fully automated philosophy is new to the Sultanate and is being fully supported by Orpic stakeholders.
Despite the challenges that this type of operation represents, all parties are convinced that in the long term the benefits will be significant for all and that a win-win situation can be achieved. It is also noteworthy to mention that the new operations are being undertaken keeping in mind Orpic’s core value of minimising impact to the environment and that equipments like the vapor recovery unit or the oily water treatment system will mitigate environmental impact across our operational areas. Additionally, the facility will be equipped with proactive measures to prevent any type of incident and with mitigation and automated equipments that would act in case of an emergency. All these equipments, along with the control system will ensure a proper management of all the processes in order to provide value added services to our customers.
Suarez will be speaking on the first day of the Tank World Expo conference about the MSPP on April 12 and 13. For more information and to register to attend, click here