Bloomberg reported that International Petroleum Investment Company may spend USD 6.5 billion on 2 oil refineries to be built in the UAE and Oman.
According to documents released by the Abu Dhabi government owned company, the investment firm may spend USD 3.5 billion to build 200,000 barrel per day oil refinery at Fujairah, a bond prospectus posted on the London Stock Exchange website yesterday showed. That's an increase from the USD 3 billion the company said it would spend on the project in a similar bond document released in March.
IPIC as the investor is known may also go ahead with 230,000 barrel per day refinery at Duqm in Oman. That facility may cost USD 6 billion with the investment split evenly between IPIC and Oman Oil.
Middle Eastern oil producers are investing in domestic refinery projects to meet local demand as well as evaluating export facilities that will allow them to ship fuels to growing markets in Asia.
Refining crude into fuels like gasoline, diesel and jet fuel allows oil producers like the UAE and Oman to benefit from the higher value those products can fetch on international markets.
IPIC is also building USD 4 billion pipeline to transport 1.5 million barrels of oil daily from Abu Dhabi's main onshore fields to Fujairah. The pipeline is expected to deliver its first oil in early 2012.
The Abu Dhabi Crude Oil Pipeline, as the project is known will allow ships to avoid transiting the Strait of Hormuz. The port at Fujairah can also host larger ships than those that can dock at Abu Dhabi's main oil loading port of Ruwais.
Mr Soozhana Choi an analyst at Deutsche Bank said that the additions will account for 20% of the global growth in fuel processing capacity and will boost Middle East refining capabilities by 60%. Both the Fujairah and the Oman refinery projects are in the engineering and design phase.
According to the bond prospectus, the plant in Fujairah which will be reached by a pipeline IPIC is also building to transport Abu Dhabi crude is set for completion in mid 2016. The Duqm facility which will be designed to use UAE and Omani crudes would be completed in 2016 or 2017 if built.
(Sourced from Bloomberg)
