The suspension of the planned Duqm Petrochemicals project in December last year appeared to be a setback for Oman’s plan to establish Duqm as a major economic hub in the sultanate.
However, Muscat has stayed the course and the billions of dollars that Omani state-owned companies have invested in building strategic industrial facilities at the Special Economic Zone at Duqm (Sezad) are yielding results.
Duqm industrial developments
Duqm Power Company, a joint venture (JV) of Centralised Utilities Company (Marafiq), part of the OQ Group, and Gulf Pacific Holding Company, recently started trial operations at its integrated power and water plant at Sezad after receiving the first consignment of liquefied natural gas feedstock.
The gas feedstock is being provided by another OQ subsidiary, OQ Gas Networks, formerly known as Oman Gas Company (OGC), which in March commissioned a pipeline to feed natural gas from Saih Nihayda in central Oman to customers in Sezad, primarily Duqm Power Company.
The integrated power and water plant is intended to be a centralised utilities facility for the entire industrial master development at Sezad.
It includes a 326MW power generation unit, a desalination plant with an output capacity of 36,000 cubic metres per day (cmd), seawater suction units with a supply capacity of 1.5Mcmd, and a 132kV electricity transmission line to supply power from the plant to the upcoming crude oil storage park at Ras Markaz.
Oman Tank Terminal Company (OTTCO), the operator of the Ras Markaz oil storage project, is at an advanced stage of construction with the first phase of the multi-phased oil storage complex. Located about 80km north of Sezad, it will be the Middle East and North Africa (Mena) region’s largest crude oil storage facility when completed.
OTTCO, also an OQ subsidiary, has meanwhile signed two agreements with Port of Duqm, covering projects at Sezad. The two agreements relate to sub-usufruct and berth operating licences.
OQ also continues to make progress with the engineering, procurement and construction (EPC) works on the estimated $7bn Duqm Refinery megaproject, the biggest industrial component of the Duqm economic masterplan.
Separately, Oman Oil Marketing Company (OOMCO), the domestic fuel marketing subsidiary of OQ Group, has said it plans to commission its new bunker terminal at the Port of Duqm before the second quarter of this year.
OOMCO initiated the estimated $50m project to build a permanent bunker terminal barge in 2013 and signed a bunkering licence and land lease agreement with Port of Duqm Company (PDC) in November of that year.
Duqm’s economic appeal
With most of Sezad’s anchor industrial projects entering the completion or commissioning phases during the same period, the value addition to Duqm’s economic appeal is expected to be more than the sum of its parts.
By developing Duqm as a key industrial hub, Oman is not just building its economic potential, but also decentralising its economic offering by establishing a third industrial hotspot away from Muscat and Sohar in the north and Salalah in the south.
Additionally, the emergence of Duqm will allow Oman to offer diverse categories of international investors the chance to set up business in Oman’s Al-Wusta Governorate, located along the sultanate’s geopolitically strategic Arabian Sea coastline and away from the volatile Strait of Hormuz in the Gulf.
This article is published by MEED, the world’s leading source of business intelligence about the Middle East. MEED provides exclusive news, data and analysis on the Middle East every day. For access to MEED’s Middle East business intelligence, subscribe here.