Octal Petrochemicals builds region's first liquid chemicals terminal

The project is scheduled to be completed by June, 2008.

The liquid chemical storage terminal located at the Port of Salalah will support Octal's drive to capture a 20 per cent share of the $2.25bn global APET sheet market and become the largest PET resin manufacturer in the Middle East.

The first phase of the terminal will comprise two 5,000 metric ton stainless steel tanks designed to receive mono-ethylene glycol (MEG). Discussions are in progress with Saudi Basic Industries Corporation (SABIC), the world's largest MEG producer, to supply Octal's requirements through the new terminal.

Octal will pump feedstock chemicals off ship to the tanks and then pipe them 1,000 metres underground to Octal's main processing plant at Salalah Free Zone. The advanced system removes the need for overland transport, improving safety, reliability and cost efficiency.

The second phase of the terminal, due to be completed by September, 2009, will add a third 5,000 metric ton tank to accommodate expansion at the factory site.

The third phase, which will reach completion in 2011, will increase capacity by a further six tanks. All the tanks will be located within a 10,600-square metre area reserved for Octal at the Port of Salalah.

The piping and supporting transport infrastructure for the whole project will be in place by May, 2008. The first three tanks will hold MEG; the remaining six will contain other chemicals.

Rashid Saif Al Sadi, a member of the Board of Directors of Octal Petrochemicals, said: "We aim to produce in Salalah the most cost-effective, high-quality products on the global market, and to do that we need to have the most advanced processes which operate efficiently 24/7."

He said: "The new tank farm is very much in line with our strategy to source from the Middle East raw materials in large quantities at the lowest possible cost. This tank farm delivers the raw material in the most efficient way with secure environmental safeguards."

Commenting on the supply of MEG to Octal from SABIC, Al Sadi said: "Octal Petrochemicals will become one of SABIC's biggest customers for MEG as a result of this agreement."

Gary Lemke, Port of Salalah CEO, said:

"Octal's ambitious growth plans are playing a very important role in the development of the Port of Salalah - and they are raising the profile of Salalah as an ideal location for quality, large-scale manufacturing for international export. Octal's chemical storage facility is a first for the port."

Based at Salalah Free Zone, Octal Petrochemicals is building a state-of-the-art integrated PET (polyethylene terephthalate) and APET (amorphous polyethylene terephthalate) production plant, at an initial cost of $300m.

Total investments in the plant are set to rise to as much as $1bn upon completion with two phases of expansion scheduled for 2009 and 2011. The chemical storage facility will support Octal's growth. Production capacity now stands at 30,000 metric tons per annum, projected to rise to 330,000 by early 2009, with annual global export sales expected to reach $500m by the end of this year.

Stainless steel for the new liquid chemicals terminal is being imported from China. The design was completed in Germany as well as the supply processing equipment, including electrics, pipelines and cables. Fluor Corporation is the technology advisor to Octal and the project manager. Tenders for the second phase of the project will go out in September, 2008.

Octal Petrochemicals aims to become the world's largest producer of APET sheet packaging, with 20 per cent market share, and the Middle East's largest producer of PET resins. Key export markets are Europe and the US.