Oman-based Sohar Asphalt has signed up China Chemical Hualu Engineering Company for the construction of the sultanate’s first bitumen refinery at Sohar Industrial Port being set up at an investment of over $400 million, reported Oman Observer.

Sohar Asphalt was established in 2015 to set up a 30,000 barrels per stream day capacity bitumen refinery designed to process heavy crude into bitumen as the main product, as well as atmospheric and vacuum distillates as byproducts.

An engineering-procurement-construction (EPC) contract was signed by the two sides in a virtual setting late last week, said the report. 

A 27-hectare site has already been earmarked for the project adjoining the Sohar Refinery of OQ - the sultanate’s integrated energy company - at Sohar Port. Heavy crude as raw material for the bitumen refinery will be sourced from a number of international producers, including from Central and South American producers.

The feedstock will be shipped by crude carriers to the Port of Sohar and stored at the Liquid Terminal operated by Oiltanking Odfjell Tank Terminal at the port. Dedicated storage facilities will also be constructed at the site of the bitumen refinery, it stated.

Annual production is estimated at one million tonne of bitumen and 600,000 tonne of naphtha, straight-run distillates and vacuum gas oil. 

The project’s strategic national significance lies in the fact that when fully operational by 2023, it will go a long way in alleviating Oman’s longstanding dependence on bitumen imports for road paving and related applications, said the report. 

Importantly, the project’s output of straight-run bitumen, which is primarily used in road paving, will be exported to a number of markets in the Gulf and the Indian-continent. The Omani market is expected to be an important consumer as well it added.