Oman plans $600m PET packaging factory
Ompet has leased a 330,000 square metre plot of land within the Sohar Port free zone for development of the factory, with tendering and construction scheduled to begin in early 2015. Once complete the facility will employ around 300 people.
PET demand soars
The new facility will be sited near to the existing Oman Oil Refineries and Petroleum Industries Company (Orpic) plant in Sohar. The Ompet factory will use all of the Orpic aromatics facility’s production of paraxylene, a major component of polyethylene terephthalate (PET).
“We are delighted to have finalised a deal with Ompet to lease a significant part of the port for producing renewable packaging materials. Demand for PET packaging globally reached 12 million tonnes in 2010, and this will continue to grow to around 20 million by 2019,” said Sohar CEO Andre Toet.
“While the processes and technology to produce environmentally-friendly packaging have been around for some time, we believe that Sohar possesses the raw materials, energy, and ideal location to capitalise on encouraging market trends, and produce and distribute it on a global commercial scale,” he added.
Net PET exporter
One of the project’s main aims is to reduce the import requirements for PET products in Oman and the region generally. And by focusing added-value products, Oman will also boost returns from its oil production, which incurs higher extraction costs than faced by its GCC neighbours.
“The Gulf region is close to becoming a net exporter of PET products, and could soon have a surplus of 1 million tonnes. We want to be a contributor to that surplus, and to help Oman become a byword for high quality PET exports. As we continue to accommodate the commercial traffic from Muscat, we are also aware of the opportunities that will come as a result of increasing demand, particularly in the Gulf and Asia-Pacific,” said Toet.
Ompet is a joint venture between the Oman Oil Company (OOC) and LG International, which owns 30% of the enterprise, with OOC holding 50%, and its Takamul Investment Company subsidiary owning the remaining 20%. The venture was formed in 2012, with the aim of creating a PET facility.
“The development of the [PET] complex is an important investment project and will help step up downstream projects based on PET. In addition, the project will create more employment opportunities for Omanis,” said Nasser bin Khamis Al Jashmi, chairman of OOC and an under-secretary at Oman’s Ministry of Oil and Gas, at the time of the joint venture’s formation.