Oman’s new Duqm oil refinery shipped out its first diesel cargo on Tuesday amid trial runs at the complex, the latest facility in the Middle East to commence operations, according to several trade sources and ship tracking data.
New refining capacity in the Middle East is being ramped up to capture strong profits from sales of refined products driven by tight supply and low inventories globally.
The 230,000 barrel-per-day Duqm refinery – a 50:50 joint venture between Oman’s OQ Group and Kuwait Petroleum International – began trial runs in the middle of this year, three trade sources said.
Earlier this week, Kuwait Petroleum International (KPI) CEO Shafi al-Ajmi said that as of the end July the Duqum refinery project was 98.9 percent complete.
The refinery loaded at least 35,000 metric tons of diesel on the tanker Hellas Margarita on Tuesday and the cargo is bound for east Africa, ship tracking data from analytics firms Kpler, Vortexa and LSEG showed.
A second diesel cargo of about 50,000 tons is scheduled to load from Duqm in the next few days and it is also bound for east Africa, two shipbroking sources said.
Duqm has so far exported around 25,000 tons of naphtha in June, data from LSEG and Kpler showed.
The refinery also exported almost 90,000 tons of high-sulphur fuel oil between end-April and mid-May, LSEG data showed.
OQ and KPI did not respond to requests for comment.
“Duqm has been going through some test runs, commissioning (of the plant) is expected anytime soon and production (to be) ramped up within six months or so,” analysts at consultancy FGE said.
They added that the refinery is expected to increase crude throughput to above 210,000 bpd, running at 90 percent of capacity, by the end of the first quarter next year.
Trade sources said the refinery could produce around 130,000 bpd of diesel and 60,000 bpd of naphtha.
“Refined oil product flows out of Duqm will likely be regular from either December or January,” said Vortexa’s head of APAC analysis Serena Huang.
FGE analysts said it expects a significant portion of Duqm’s cargoes to be shipped to Africa rather than Asia because of the shorter distance.
Source: Al Arabiya