Oman's state-owned energy company OQ is advancing a strategic natural gas liquids (NGL) project, which is expected to attract strong interest from leading international contractors. Bids for the front-end engineering and design (FEED) contract are likely to be submitted in early May.

Project Scope and Location

The project envisages developing NGL extraction facilities at Saih Nihayda. The extracted liquids will then be transported via a new export pipeline—spanning more than 200 kilometres—to Duqm. In Duqm, a fractionation complex, along with storage and marine export facilities, will process and prepare the NGLs for export. The facility is expected to handle and process over 48 cubic metres of gas per day, making it a sizeable development, though the precise capacity has not been independently confirmed.

Contracting and Bidding Process

A tender is underway to shortlist companies for the FEED contract, which will eventually lead to a follow-on engineering, procurement, and construction (EPC) award. OQ is likely to select at least three international contractors or groups to perform parallel, paid FEED studies. Numerous major international contractors have pre-qualified and are considered key contenders, including:

• JGC and Chiyoda Corporation (Japan)
• CTCI (Taiwan)
• Samsung E&A and Hyundai Engineering & Construction (South Korea)
• Larsen & Toubro (India)
• KBR (US)
• Tecnicas Reunidas (Spain)
• Saipem and Tecnimont (Italy)
• Petrofac (UK)
• Sinopec (China)
• Technip Energies (France)

While some contractors may bid individually, others could form consortia. Not all pre-qualified players are expected to submit bids, and some may decline the invitation. Several companies, including JGC, Petrofac, and Technip Energies, have declined to comment on the project.

Regional Context and NGL Value

NGL projects are crucial for maximizing the value of natural gas resources by producing high-value products like ethane, propane, and butane, which command a strong price premium. This project aligns with a regional trend of increased investment in NGL facilities by leading Middle East operators. For instance, QatarEnergy has awarded an 'ultra-mega' project for NGL and allied facilities, understood to be for expansion in Mesaieed Industrial City, to a consortium including Larsen & Toubro. Separately, Adnoc Gas is finalizing an EPC deal for the fifth expansion phase of its Ruwais NGL facility in the UAE, which is expected to have a production capacity of 27,000 tonnes per day.