Canadian public-private partnership infrastructure project company, Canada Business Holdings (CBH), has announced that it will invest US$1.5bn in the sultanate for the construction of a Low Sulphur Fuel Oil (LSFO) refinery. 

The LSFO refinery aims to serve the growing shipping needs for International Maritime Organization (IMO) compliant cleaner fuel for shipping propulsion, it said. 

The company added that the refinery has a planned capacity of 300,000BPD in phases and, without giving its exact location, said that the refinery would be facing the Arabian sea, as the natural depth of the port area qualifies it to receive large ships with deep keel. 

The company stated that the refining process will be based on a unique Canadian technology with proven results in turning poor quality fuel into cleaner and higher grades.

A CBH official said, “CBH is delighted to cooperate with the Government of Oman to invest in the LSFO refinery. Oman is one of the best located countries on the world map for such an investment. We have great confidence that our decision is a strategically sound one.”

He added, “The people of Oman are highly educated, young, and hard working. The country is resourceful and safe.” 

The company stated that the project satisfies the strict investment criterion of CBH, based on a focused investment strategy, with safe, secure, and high returns. ‘Such a refinery is a niche investment that considers the challenges facing the oil and gas industry and focuses mainly on market demand. Such demand is led by international law and the viability of the global logistics business,’ it said. 

‘The total investment is US$1.5bn. The expected returns on investment is 22% per annum,’ it added.

The IMO has mandated the use of very low sulphur fuel oil (VLSFO) in marine shipping, starting January 1, 2020. The regulation is part of IMO’s 2020 programme aimed at reducing sulphur emissions from marine transport by 80 percent.