Petroleum Development Oman (PDO) has signed a $200-million pipe supply contract with an Omani factory as part of its in-country value (ICV) strategy to retain more of the oil and gas industry’s wealth in the sultanate.

The four-year deal will mean the Gulf International Pipe Industry (TMK-GIPI) mill based in the Sohar Industrial Estate will manufacture a variety of pipelines sized 6-24 inches in diameter for both PDO and other operators, said a statement from the company.

TMK-GIPI is the first manufacturer of high-pressure steel line pipes and casing pipes in Oman and its production plant is also the first in the region to make high pressure 24-inch electric resistance welded (ERW) steel pipes, it said.

As a result of the contract award, the company will expand its current production range and introduce a new manufacturing line for small pipeline categories to cater for high demand of such sizes from PDO and the rest of the oil and gas industry, it added.

The agreement marks the successful implementation of one of the business opportunities launched by PDO for Omani businesses at the major ICV Blueprint Strategy Summit in Muscat in December 2013. This laid down a framework for the development of a robust and sustainable local supply chain for the sector.

PDO managing director Raoul Restucci, said: "We are delighted to sign this contract with TMK-GIPI which will see an Omani factory manufacturing piping both for us and other operators. As well as boosting ICV, there is also a fantastic opportunity for this state-of-the-art plant to supply its products and services across the region.”

"This deal makes concrete our commitment outlined at the ICV conference three years ago to do everything we could to leverage the collaborative efforts of the oil and gas sector to progressively and effectively develop a competitive Omani supply chain,” he said.

"This is vital for the development of jobs, training and skills for nationals, increasing investment in the sultanate generally and ensuring the ongoing prosperity and diversification of its economy,” he added.

Vladimir Shcherbatykh, CEO of TMK-GIPI, said: "We are honoured that this contract will build on our long-term partnership with PDO. We are committed to developing our investments in Oman and to support PDO to achieve its long-term goals.”

"It is a great opportunity for our company to work more closely with PDO, which will allow us to reach our common goals in terms of the ICV programme and to work together for the betterment of Oman,” he added. – TradeArabia News Service