Two Korean companies win stake in Oman project

Daewoo E&C and Samsung Engineering have both won a stake in a construction deal worth over 5 trillion won ($4.4 billion) in Oman.

The two Korean construction companies announced Monday that Duqm Refinery, a joint venture of Oman Oil Company and Kuwait Petroleum International, gave them the green light to proceed with construction.

The project, located some 550 kilometers (341 miles) south of Oman’s capital Muscat, is the construction of a petrochemical plant that will produce 230,000 barrels a day, the biggest output in the country.

The construction work has been split into three parts, or packages. The two Korean companies, along with their business partners, won the first two, which amount to $4.75 billion.

“We entered the Oman market in 1999 by constructing breakwaters and built a 2,000 megawatt power plant in 2015, which was the biggest by capacity,” a spokesman from Daewoo E&C said. “We think it is very meaningful to win a big deal while the orders coming from the Middle East have fallen due to low crude oil prices.”

Daewoo will work with Spain-based Tecnicas Reunidas on the first package and construction is expected to last 47 months. The first package is worth about 3.1 trillion won, and Daewoo’s share will amount to 1.8 trillion won.

Samsung Engineering and the United Kingdom-based Petrofact will work on the second package. The second package is worth about 2.2 trillion won, and Samsung’s contract will amount to half of the total, or 1.1 trillion won.

“We have experience of proceeding with utilities and off-sites projects in the past and we expect to strengthen our competitiveness and influences not only in Oman but also in other countries in the Gulf Cooperation Council by completing the construction successfully,” said a spokesman from Samsung Engineering.

BY KIM YOUNG-NAM [kim.youngnam@joongang.co.kr]