Oman and Kuwait sign deal for joint petrochemical venture

Oman and Kuwait have signed an agreement to push ahead with a major petrochemical venture despite the withdrawal of Saudi chemical company Sabic.

Oman’s OQ Group and the state-owned Kuwait Petroleum International (KPI) agreed the deal at an international oil conference in the capital Kuwait City on Tuesday.

The project strengthens bilateral energy ties and leverages its strategic location in Oman’s Duqm special economic zone, OQ said on X.

Sabic – Saudi Basic Industries Corporation – one of the world’s largest petrochemical producers, has failed to respond to its two partners regarding the implementation of the project, the Arabic-language daily Alseyassah said in late 2025, citing informed sources.

Sabic declined to comment about the reports.

OQ, KPI and Sabic announced plans in late 2022 to build a petrochemical complex consisting of a steam cracker, derivative units and a natural gas liquid extraction facility. 

The complex will rely on feedstock from the Duqm Refinery, including liquefied petroleum gas, naphtha and natural gas from Oman. 

After the 2022 announcement, the Saudi daily Asharqlawsat reported that Sabic would control 40 percent of the petrochemical venture while the remaining 60 percent would be owned equally by the Kuwaiti and Oman partners.

It quoted Sabic’s CEO Abdulrahman Al-Faqih as saying after the announcement:“The agreement contributes to identifying ambitious sustainable growth opportunities by combining the capabilities, experiences and technologies of its partners.”

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Duqm refinery, owned by OQ and KPI, was completed in late 2023 and has a capacity of 230,000 barrels per day.

Kuwait said in September 2025 that it targets the production of nearly 14.5 million tonnes of petrochemicals by 2040 as part of a long-term drive to lessen reliance on volatile crude oil sales.

The target, which will require heavy investment, goes parallel with plans to expand crude oil output capacity to a record high of four million barrels per day by that year, the oil ministry said.Citing local sources, Alseyassah said on Thursday that the Duqm project could cost $8-10 billion and that OQ and KPI would still undertake the project if they could not find a third partner.