Omani petchem project worth $550mn under threat

Uncertainty after power authority cancels electricity allocation

The project was set to produce chlor alkali and ethylene dichloride.
The project was set to produce chlor alkali and ethylene dichloride.

A $550mn Omani petrochemicals project set to begin construction later this year may have to be binned following a decision by Oman's power sector authorities to cancel electricity allocations to the venture.

South Korea's Hanwha was preparing to begin construction of the chlor alkali and ethylene dichloride project at Salalah Free Zone in Dhofar Governate after it was awarded the contract by Saltic LLC FZC.

However, having received notice of the termination of the power supply allocation, Saltic now face the prospect of cancelling the project.

“We are obviously stunned by this decision, which came without warning from Oman Power and Water Procurement Company SAOC (OPWP) as instructed by the Authority for Electricity Regulation (AER), Oman,” a high-ranking representative of Saltic FZC told Oman Daily Observer.

“The action puts into serious doubt the ongoing implementation of the project, which will remain in limbo until a decision is taken to restore the allocation of 150 megawatts earmarked for the project,” the executive added.

The official said the power authorities' decision to pull the plug on the project came at a critical juncture in its development.

Work on the project, once touted for its potential to generate hundreds of jobs in Dhofar Governorate, as well as spawn the growth of small and medium enterprises, has since ground to a halt at a 35-hectare site within the free zone.

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