Al Baleed Petrochemical Secures New Gas Pact: What It Means for Oman’s Petrochemical Industry and Investors
MUSCAT, NOV 7 – A petrochemicals park currently in the early stages of development in Salalah Free Zone, southern Oman, has secured a crucial natural gas supply commitment from the Omani government, facilitating the project’s swift progress.
Al Baleed Petrochemical, supported by private Omani investors, announced on Thursday that it has signed a Natural Gas Sales Agreement (NGSA) with the Integrated Gas Company (IGC), the Sultanate’s exclusive natural gas aggregator and supplier. This agreement, signed earlier this week under the patronage of Sultan bin Salim al Habsi, Minister of Finance, covers Al Baleed’s gas needs for both fuel and feedstock. Eng Saeed al Shanfari, Managing Director of Al Baleed Petrochemical, represented the company during the signing.
The envisioned petrochemicals park is designed as an integrated complex that will utilize the abundant methanol, ammonia, and LPG produced within Salalah Free Zone to manufacture a variety of high-demand chemical products.
In a statement, Al Baleed Petrochemical emphasized, “This agreement underscores our commitment to supporting Oman’s industrial and economic development, aligning with Oman Vision 2040’s goals of energy security and sustainable growth." The company added that the agreement is "a significant milestone in securing a sustainable and reliable gas supply for the industrial sector."
This Gas Sales Agreement is part of a series of key achievements advancing the park’s development. Earlier this year, the project engaged Japan-based Morimatsu, specialists in industrial process equipment design and manufacture, to handle the basic and detailed engineering design for the complex.
The petrochemical park is planned as a hub of modularized processing units, including a pioneering Propane Dehydrogenation (PDH) plant that will use locally sourced LPG as feedstock. In December, Lummus USA, a leading licensor of proprietary process technologies, was contracted to conduct the Front-End Engineering Design (FEED) study for the project.
Additionally, Italian technology licensor Conser was chosen to support the development of a unit to produce maleic anhydride, an essential intermediate in biodegradable plastic manufacturing. Conser, majority-owned by Italy-based sustainable solutions group MAIRE, will provide technology licensing, process design packages, and catalyst supply for a plant with an annual capacity of 50,000 tonnes.
Phase 1 of the three-stage petrochemicals park will also include production facilities for Formic Acid (85%), Acetic Acid, and Hydrogen Peroxide (35% and 50%).
More recently, Al Baleed Petrochemical disclosed ongoing negotiations with OQ Base Industries (OQBI), a subsidiary of OQ Group, regarding the long-term supply and security of vital feedstocks such as methanol, LPG, and ammonia from OQBI’s integrated complex in Salalah Free Zone. OQBI operates three advanced plants with a combined capacity of 1.816 million tonnes per annum.
Al Baleed Petrochemical aims to lessen Oman’s dependence on imported industrial chemicals while boosting the country’s export capabilities for high-value petrochemical products.
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The secured gas supply agreement for the Salalah Free Zone petrochemicals park represents a strategic leap toward industrial self-sufficiency and export diversification in Oman. Businesses should view this as an opportunity to tap into a burgeoning hub for advanced chemical production, while investors should focus on the long-term potential of integrated, sustainable industrial growth aligned with Oman Vision 2040. The park’s innovative use of local feedstocks like LPG and methanol signals a shift towards value-added manufacturing, reducing import dependence and opening new high-value export avenues.
