The state-owned Oman Oil Refineries and Petroleum Industries Company (Orpic) is to invest $320 million in building a 290km pipeline that will help transfer refined products between Muscat and Sohar, according to local media.

The pipeline is expected to start operations by mid-2017, the Times of Oman reported.

The Muscat Sohar Product Pipeline (MSPP) and the Al Jifnain Terminal project will enable a connection between Orpic’s Mina Al Fahal (MAF) Refinery in Muscat and the Sohar Refinery with a new storage and distribution terminal located in Jifnain via a bi-directional pipeline network, the newspaper said.

Andres Suarez, general manager of Orpic Logistics told the Times of Oman that the Al Jifnain Terminal will have an investment of around $100 million of the total capital expenditure, while the pipelines and associated investment in both Sohar and Mina Al Fahal Refineries will be around $220 million.

The pipeline network will be divided into three sections with 45 kilometres of pipeline joining the Mina Al Fahal and Jifnain Terminal, 25 kilometres joining the Jifnain Terminal and Muscat International Airport, and 220 kilometres between the Sohar and Jifnain Terminal.

The pipeline network will act as a new logistics system and will eliminate the need for the use of vessels and tankers to transport oil products. This will bring down the overall cost of transport and distribution of oil products and will save $20 million per year for the oil logistics system in Oman, it was reported.

Suarez commented saying: “The project is fully a commercial one and its returns depend only on the revenues generated from the use of the logistics assets of Orpic customers, with no financial aid from the government. Additionally, the project has been financed by the Ahli Bank and Ahli United Bank.”