Oman chases bigger slice of ship oil trade

dubai — Oman, the biggest Arab oil producer outside of Opec, is turning up the heat in a regional battle for business from ships in need of fuel with a $600 million deal to build storage tanks at the port of Sohar.

Sohar Port and Freezone signed a contract with Singapore-based trader Trescorp Alliance Pte to build an initial fuelstorage capacity of 600,000 cubic meters (21.2 million cubic feet) that will start operating by 2020, the Omani company’s chief executive officer, Mark Geilenkirchen, said in an interview. Trescorp plans to triple the facility’s capacity to 1.8 million cubic meters within a year, he said Monday in Dubai.

The Indian Ocean port of Sohar is taking aim at some of the business that the oil trading hub of Fujairah, located on the same coastline in the UAE, has had pretty much to itself.

Fujairah is the Middle East’s biggest hub for ship fuelling, or bunkering, and will provide more than four times the oilstorage capacity that Sohar expects to have by 2020.

Both ports are located outside the Strait of Hormuz, a shipping bottleneck vulnerable to potential disruptions amid political tensions in the area.

About 20 per cent the world’s oil supply passes through the strait, according to the United States’ Energy Information Administration.