OQ Launches Tender for New Natural Gas Liquids Project: Key Opportunities for Investors and Entrepreneurs in Oman
MUSCAT: Local and international engineering firms are invited to participate in a competitive tender for the Front-End Engineering Design (FEED) of a new Natural Gas Liquids (NGL) extraction project at Saih Nihayda in central Oman. This upstream project will provide feedstock for a major petrochemicals complex planned in the Special Economic Zone at Duqm (SEZAD).
OQ, the integrated energy group and a company under the Oman Investment Authority (OIA), is leading the development of the NGL extraction plant. On November 13, OQ launched the prequalification process for qualified engineering firms interested in bidding for the FEED contract.
According to OQ, “This project is a key step in advancing Oman’s integrated energy infrastructure. The NGL Extraction Project covers the entire NGL value chain—from extraction at Saih Nihayda to fractionation and export facilities in Al Duqm.”
The extraction facilities will be located at Saih Nihayda, with extracted NGLs transported to Al Duqm for fractionation and storage prior to export. OQ seeks to prequalify firms capable of delivering FEED, detailed engineering, procurement, and construction (EPC) for LPG/NGL facilities, managing the project from the FEED phase through to commissioning and performance guarantees.
The tendering process was launched shortly after OQ signed an agreement with the Integrated Gas Company (IGC), Oman’s sole aggregator and supplier of natural gas, securing feedstock for the plant. The deal includes a supply term sheet guaranteeing 48 million cubic meters of natural gas per day for 20 years to the Saih Nihayda NGL Extraction Project.
Phase One of the project will involve gas separation, storage, and export facilities at SEZAD. The term sheet also allocates gas resources for Phase Two to the Duqm Petrochemicals Complex, planned to produce about one million tonnes of ethane annually. This integrated approach is expected to enhance in-country value by fostering a comprehensive industrial ecosystem.
NGL plants are essential for converting natural gas into valuable petrochemical feedstocks like ethane, propane, butane, and condensate. These products are crucial for steam crackers and downstream units that manufacture ethylene, polyethylene, polypropylene, and other key chemical building blocks.
Oman’s first dedicated NGL extraction plant began operations in Fahud in 2020, supplying the Liwa Plastics Industries Complex in Suhar via a 300-kilometer pipeline to Sohar Port and Freezone. This plant, built at a cost of approximately $688 million, processes 670 million standard cubic feet of natural gas per day. Additionally, Oman LNG’s Qalhat complex produces NGLs as a by-product of LNG liquefaction.
The deadline to submit prequalification documents for the Saih Nihayda project is December 10.
Special Analysis by Omanet | Navigate Oman’s Market
The launch of the NGL Extraction Project at Saih Nihayda, linked to the upcoming petrochemicals complex at Duqm, signals a strategic push toward an integrated energy and industrial ecosystem in Oman. For businesses and investors, this represents significant opportunities in engineering, construction, and downstream petrochemical markets, while emphasizing the importance of securing partnerships and expertise in NGL and petrochemicals. Smart investors should closely monitor the project’s progress, as it promises long-term value creation from natural gas infrastructure and enhanced in-country industrial capabilities.
