Pact inked for $1.76bn oil terminal at Ras Markaz
WORLD’S LARGEST: OTTCO wins exclusive rights to develop world-scale crude storage hub near Duqm
The Special Economic Zone Authority at Duqm (SEZAD) signed a usufruct agreement with Oman Tank Terminal Company LLC (OTTCO), a wholly owned subsidiary of Oman Oil Company (OOC), for the establishment of a major crude oil Storage Terminal at Ras Markaz near Duqm.
Total investment in Phase 1 of the storage facility, which at full build will rank among the largest of its kind in the world, is pegged at $1.76 billion. It includes $815 million towards the cost of the crude oil storage tanks, and the balance $941 million as the cost of construction of the marine and infrastructure facilities.
The agreement was signed by Yahya bin Said al Jabri, Chairman of SEZAD; Eng Isam bin Saud al Zadjali, CEO of Oman Oil Company; and Said bin Hamoud al Maawali, Director of OTTCO.
At the heart of the Ras Markaz Crude Oil Terminal project is a vision to position the Sultanate as an international hub for storage of crudes and petroleum derivatives, leveraging Oman’s strategic geographical location on the Indian Ocean. The project also creates an additional port for crude exports.
Ras Markaz, located 70 km south of Duqm, was incorporated into SEZAD via Royal Decree No 5/2016 issued on January 28, 2016. The terminal covers an area of 1,253 hectares.
Significantly, the usufruct agreement grants OTTCO exclusive rights for the storage of crude oil and its derivatives at Ras Markaz over a 20-year (plus five years) concession granted by SEZAD. It includes a 40year lease for the area that falls within the Ras Markaz Crude Oil Storage Terminal.
An initial five-year-plan for the development of the Ras Markaz area calls for the construction of oil tanks.
These are for the storage of crude oil and other derivatives, establishment of floating platforms and piers for the import and export of crude oil and its derivatives, a pier for tug boats, subsea pipelines ranging in length from 5 – 7 km for the handling of incoming and outgoing products, and a pumping room. Also envisages are labs, control rooms, administrative offices, and safety and security facilities.
The new terminal will be equipped to undertake blending activities, and loading and unloading of ships.
The agreement also commits OTTCO to developing all five phases of the project either solely or in partnership with third party investors. Storage capacities planned during Phase 1 of the project are estimated at around 26 million barrels, which is deemed sufficient to cater to demand for the first 10 years of the project. Capacities will be ramped up in trend with demand growth.
Also as part of the terminal’s Phase 1 development, OTTCO will invest in marine facilities for the handling of import and export crude oil at the rate of 100 barrels per hour.
A further investment around $700 million is anticipated in Phase 1, in addition to some $225 million earmarked for expanded basic infrastructure. Investments in each of the subsequent three phases are projected at $700 million apiece, while the corresponding investment in basic infrastructure for each phase is about $381 million.