The MSPP project entered into stream

1. 2 JUNE/JULY 2018 VOLUME 14 ISSUE NO.3
PROFILE l MUSCAT SUHAR PRODUCT PIPELINE
O
rpic & CLH’s joint venture two-way
multi-product Muscat Suhar Product
Pipeline represents a milestone for
Oman’s flourishing oil product industry.
The $336 million multiproduct pipeline &
storage network, connecting Suhar refinery,
the new Jifnain terminal, Mina Al Fahal
Refinery in Muscat and Muscat International
airport is the first of its kind in Oman and will
help elevate the region to become an oil hub in
the global market.
The fully automated network has been
designed to optimise the global cost of transpor-
tation and distribution of oil products in Oman,
including vessels, tankers and power consump-
tion utilised in the pipeline transportation.
Taking almost three years to complete,
commercial operations at its first phase, which
comprised the multiproduct & bidirectional
pipeline between Suhar refinery and Jifnain ter-
minal, started in December 2017. In February
2018, the second phase, comprising the pipe-
line network from Muscat refinery to Jifnain
terminal, was brought online.
The new infrastructure also comprises of a
dedicated jet fuel pipeline between Al Jifnain
terminal and the new Muscat International
airport.
The new storage terminal in Al Jifnain com-
prises 170,000 m3
of capacity spread across
12 tanks for M95 & M91 petrol, diesel and
jet fuel. It has 16 multiproduct loading bays
with the capacity to load 700 trucks per day
and has a fully automated loading process.
Operations have been designed to enable a
gate-to-gate time for trucks of less than 30
minutes.
In an interview with Tank Storage Magazine
general manager Andres Suarez hopes that
this project will act as an example on how
to bring these fully automated assets to the
region.
‘The project is the first of its kind in Oman
and will enable the transfer of knowledge
from CLH to the Omani professionals on how
to design, build and operate this type of fully
automated assets, including multiproduct
pipelines.
‘Oil product consumption in Oman has
been growing rapidly in recent years, reaching
yearly growth of 11% and as a result, new
and modern logistic infrastructure was
needed. Existing terminals were over 20
years old and there were no refined product
pipelines.
‘There was also a need to increase the
security of supply of oil products to the
population. This new terminal adds around
12 additional days of demand coverage and
As consumption of oil
products continues to
grow in Oman, modern
and efficient pipeline &
terminal infrastructure was
needed, prompting the creation
of the Muscat Suhar Product
Pipeline & Al Jifnain terminal
network
Amidstream
firstforOman
MSPP AT A GLANCE:
The $336 million project comprises a 290-kilometer multiproduct pipeline network and a
storage terminal with 170,000 m3
of storage capacity
There are three pipelines in total, connecting Suhar refinery, Al Jifnain terminal and Mina Al
Fahal refinery in Muscat as well as a dedicated jet fuel pipeline between Jifnain and the new
Muscat International airport
Construction started in 2015, with the entire project fully operational by February 2018
Since starting operations, 25,000 trucks have been loaded at Jifnain terminal and more than
one million tonnes has been delivered
Jifnain terminal supplies more than 70% of the total demand for oil products in Oman
01

2. 3JUNE/JULY 2018 VOLUME 14 ISSUE NO.3
PROFILE l MUSCAT SOHAR PRODUCT PIPELINE
increases the nation’s storage capacity for oil
products by 70%.
‘It has been designed from a global
perspective to make sure we optimise the
logistics cost and secure the supply to the
population. The locations of the pipelines
were not selected randomly, it was based on
an operational study, utilising CLH’s network
optimisation models and tools, and this was
the first time a study like this was done.’
UNIQUE IMPLEMENTATION
The project was implemented through an EPCC
contract based on FIDIC silver book. It also
contributed to established targets of providing
greater value to the country, including the
development of Omani national staff and of
many local companies, the investment of $39
million in local capital projects as well as $110
million in services and goods purchased from
local vendors and suppliers, representing 44%
of the total investment.
However, creating an infrastructure asset
first for Oman did present some challenges
for Orpic Logistics, the joint venture between
Orpic and CLH.
The timeline of the project was crucial,
according to Suarez due to its financing and the
need to improve
safety and secu-
rity of supply.
‘For our staff
and contractors
it was the first
time they were
involved in a pro-
ject with such
a high level of
automation and
we also had to
align the expectation of a huge terminal with
ten nationals.
‘It was also critical to avoid any oil supply
disruption to the market during start up of
the assets as 70% of the total demand of the
country is oil products, which was going to
be supplied from Al Jifnain Terminal. It was
critical to come to this level of activity without
affecting supply to the market. We minimised
the risk and implemented the start up in a
two-phased approach, utilising the flexibility
provided in the EPCC contract.’
However, amid these challenges there were
also learning opportunities for any future pro-
jects. Suarez says: ‘One of our success factors
was the fact that a partnership was created
between two complementary partners. Also,
the 3,000 people involved in the project and
aligning them to the same goals was also
another key to the project’s success.’
A PROMISING OUTLOOK
Despite Oman’s oil product market undergoing
a rapid shift since the price of crude plum-
meted two years ago, the country’s economy
continues to flourish, and more investment is
coming into the region.
In 2015, demand for oil products was growing
at a rate of around 9-10% each year, and this had
been the case for the last seven years.
‘The future looked promising,’ Suarez says.
However, during the course of 2016, the price
of crude oil dropped.
‘Oman relies heavily on revenues from crude
oil,’ he explains. ‘The economy started to slow
down and there was decreasing consumption
of oil products. Also, in 2016, the government
decided to reduce the subsidies on the price
of oil products, which resulted in an increase in
price. As a result, prices at fuel forecourts have
increased by as much as 50% and people are
now carefully thinking about the cost of fuel.
‘The slow down of the economy combined
with higher prices at petrol stations have
produced a slight decrease in the consumption
of oil products.
‘I believe this trend will continue in 2018.
But now that the oil price is starting to reach
the 60s or 70s level, the decrease of oil prod-
ucts demand will soften. I think that for the
next two years there will be flat consumption
and then it will start growing again.’
Suarez adds that the company is also
keeping a close eye on possible future invest-
ments in Oman and the Middle East.
01 The Al Jifnain storage
terminal has 170,000 m3
of
capacity across 12 tanks and
the capability of loading 700
trucks per day
02 The pipeline and storage
terminal network project is
the first of its kind in Oman
03 Orpic Logistics general
manager Andres Suarez
02
03