The Special Economic Zone Authority at Duqm (SEZAD) has granted Oman Tank Terminal Company LLC (OTTCO) a Usufruct Right to construct the Ras Markaz crude oil storage terminal. OTTCO is one of Oman Oil Company’s subsidiaries, the Investment Arm for the Sultanate of Oman in the oil and gas industry.
The establishment of Ras Markaz crude oil storage terminal falls under the Sultanate's Promising Plan for Economic Diversification and Maintaining a Crude Oil Storage Terminal for Oman, and acts as an endeavor to make the Sultanate of Oman become an international centre for the storage of crude oil and its derivatives, leveraging in this regard upon its particular geographic location alongside the Indian Ocean. Moreover, the newly established terminal will help the Sultanate of Oman find an additional port for the export of crude oil.
Ras Markaz is located 70 km south of Al Duqm Centre and it was added to SEZAD by virtue of Royal Decree No. (RD 5/2016) issued on 28 January 2016. The total area allocated for Ras Markaz crude oil storage terminal is 1253 ha, which is deemed convenient for high storage capacities.
The agreement grants OTTCO the exclusive rights for the storage of crude oil and its derivatives in Ras Markaz Area for a period of 20 years and for five years in The Special Economic Zone Authority at Duqm, in total, provided that no other company will be permitted to establish or carry on any similar activity i.e. the storage of crude oil and its derivatives during these periods and locations.
Five year development plan
The agreement, which will last for 40 years, stipulates upon the development of Ras Markaz area under a five year plan, which will cover the establishment and construction of tanks for the storage of crude oil and its derivatives, establishment of floating platforms and piers for the import and export of crude oil and its derivatives, pier for the tug boats under water pipelines to receive and export oil with lengths ranging from 5 – 7 km. The plan will cover also the establishment of a plant for pumping oil to the tanks. The project will include laboratories, control rooms, administrative offices for the company in addition to the other safety and securities facilities. The new terminal will be designed in a manner to allow for blending , loading and unloading the ships at reasonable times the matter that help the clients save the logistic costs deeming it as a competitive privilege. Moreover, the geographic advantages for Ras Markaz location will provide and maintain a free access to the newly established terminal with an operational capacity around 99%.
The storage capacity
According to the agreement, the storage capacity for the newly established terminal during Phase I will amount to 26 million bbls and it will be executed along a period of 10 years commencing as of the date of contract signature, and the company will gradually increase its capacity as per the growth of the demand.
Volume of investments for Phase I
According to the agreement, OTTCO will be committed to develop all five phases either personally or via investment consortium or by means of soliciting and utilisation of third-parties' investments. Total investment during Phase I is expected to reach US$1 billion and US$756 million inclusive of US$815 million invested to cover the costs for the crude oil tanks and US$941 million covering the costs for the construction of the marine and other infrastructure facilities.
Investments of the remaining phases
Volume of investments for Phase II tanks is expected to be around US$700 million, US$225 million for the basic infrastructure facilities, OTTCO has estimated the investments required for the remaining three phases in an amount of US$700 million for each phase for the construction of the crude oil storage tanks and approximately US$381 million for each phase required for the establishment of the basic infrastructure facilities.
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