1. 36 | MEED | 15-21 March 2013 www.meed.com
SpecialReportTransport&Logistics
Oman is upgrading its ports to take advantage of its strategic position outside the Strait
of Hormuz and is determined to offer stiff competition to other regional facilities
local polyethylene terephthalate producer
Octal. Oman Gas is also understood to be con-
sidering exporting its liquefied petroleum gas
(LPG) via Salalah’s new terminal, with a feasi-
bility study into this believed to be under way.
A further expansion plan includes the con-
struction of a new northern breakwater. This
breakwater will not only protect the port from
harsh weather conditions, but will also allow a
dedicated cruise terminal to be built at the
port. Currently, cruise ships have to use allo-
cated spaces in the general cargo area of the
port. Once the 3.5-kilometre breakwater is
completed, they will have their own terminal,
freeing up space in the general cargo area for
non-cruise traffic.
The government intends to tender the con-
tract for the detailed design of the breakwater
this year, potentially within the second quarter,
with construction to start in 2014.
There will also be several contracts floated
during 2013 related to the rehabilitation of
Salalah’s old port. There are also plans to look
at building new container terminal berths in
12-18 months’ time, which once completed
could add 3.5 million TEUs of capacity.
Sohar port
Further up the coast, 220 kilometres northwest
of Muscat, is the Port of Sohar. Managed via a
joint venture between the Omani government
and the Netherlands’ Port of Rotterdam, the
port began shipping operations in 2004.
Since then, there have been several expan-
sions of the port and its surrounding freezone,
which houses logistics, petrochemicals and
metals companies. As with Salalah, the port is
playing a key role supporting the growth of
these businesses, importing raw materials and
handling their exports.
This year, Sohar port will announce a string
of contracts to further expand its capacity, as it
looks to draw shipping lines away from other
GCC ports.
“Due to its location, Sohar has so much
potential to attract cargo from the UAE; from
Jebel Ali, for example, from Fujairah and
O
man’s major ports of Sohar, Salalah
and the planned Port of Duqm are all
positioned outside the Strait of Hor-
muz on the Indian Ocean. This not
only has political advantages, but more impor-
tantly brings economic benefits. Calling at the
sultanate’s ports can potentially save shipping
companies billions of dollars a year by not sail-
ing into the congested Gulf. A wave of port
projects is currently under way to capitalise on
the sultanate’s strategic position.
As well as being natural trans-shipment hubs,
Oman’s ports are playing a central role in sup-
porting the country’s growing industrial base
and providing more jobs; two key government
priorities. “[The investment in Oman’s ports] is
focused on creating employment and develop-
ing the regions surrounding the ports,” says
Arjan Weerstand, general manager of project
development and implementation at the Port of
Salalah. “It is the biggest driver for a lot of the
investment made by the Omani government.”
Increased investment
Oman’s five-year plan for 2011-15 budgeted a
total of RO500m ($1.3bn) to be spent on the
country’s seaports, representing almost 10 per
cent of the total planned spending. Such is the
importance of building new infrastructure that
the 2013 Oman budget raised total spending to
RO12.9bn, an increase of 30 per cent on the
previous year’s budget. Spending on infra-
structure also increased by 30 per cent.
With plans to build a national railway net-
work that will link all the country’s major ports
finally taking shape, Oman’s ambitions to
build a strong interconnected industrial sector
are beginning to be realised.
The Port of Salalah on Oman’s southern coast
is seeing increasing volumes of business, partly
fuelled by growing trade volumes between
Africa and Asia, but also due to demand from
local industries, such as mining or chemical
firms, setting up in the Salalah Freezone.
“We are predominantly a hub port; we are
utilised by shipping lines to reduce their costs
and improve their connectivity,” says Peter
Ford, chief executive officer of the Port of Sala-
lah. “A number of companies have been taking
advantage of the connectivity we provide by
investing in the Salalah hub.”
In 2012, Salalah port handled 3.6 million
20-foot equivalent units (TEUs) of container
shipping, as well as 7 million tonnes of bulk
cargo, compared with 3.2 million TEUs in
2011. The volume of business is forecast to
continue to grow. “Local mining firms are
growing significantly and want to grow fur-
ther,” says Ford.
To meet this rising demand, the port is being
expanded and a general cargo terminal and liq-
uid jetty is currently under construction. Local
construction firm Hani Archirodon Construc-
tion is overseeing the scheme, which will see
the terminal’s cargo-handling capacity raised
from 6.5 million tonnes a year (t/y) to 20 mil-
lion t/y of dry bulk commodities and 6 million
tonnes of liquid products.
The facility is due to be completed by the end
of 2013, but it is already attracting interest from
companies looking to use the port to export
their goods. Local chemicals producer Saltic
intends to use the terminal and jetty once its
new caustic soda and ethylene dichloride com-
plex has come onstream in the Salalah freezone
at the end of 2014. Saltic will use the expanded
facilities to handle its ethylene and salt feed-
stock imports and its caustic soda exports.
Several other petrochemicals projects in the
freezone will also use the new port facilities,
including Salalah Methanol Company’s $1bn
methanol plant and a facility planned by the
Rebecca Spong
Portsunderpinindustrialgrowth
OMAN
Key fact
Duqm port will play
a major role in the
export of refined
and non-refined
Omani minerals
Source: Port of Duqm Company
36-37 SR Oman.indd 36 14/03/2013 17:30

2. 15-21 March 2013 | MEED | 37www.meed.com
lowed by the design-and-build contract tender.
The terminal is set to be completed by 2017.
It will handle the exports and imports of a
proposed new refinery to be built in the eco-
nomic zone and which will have a capacity of
230,000 barrels a day. The port will comprise
a multi-purpose terminal with a capacity of
0.8 million tonnes, a container terminal with
a capacity of 3.5 million tonnes and a dry bulk
terminal with a capacity of 5 million tonnes.
Railway support
A further essential component supporting
the growth of Oman’s industrial base is the
planned national railway network, which will
connect with the sultanate’s ports.
In January, the government identified the rail
network as a priority investment in its 2013
budget and revealed it would use some of the
billions of dollars of aid pledged by GCC gov-
ernments to fund it. It also confirmed that the
route would definitely include a connection to
the Port of Salalah under phase 1 of the scheme.
The tender for the preliminary design of the
network was released in February and port
authorities are now looking how to integrate
their ports with the railway line. “We’ve allo-
cated a space on our concession [at the Salalah
port] for a dock rail terminal as we see signifi-
cant value in the connectivity,” says Ford.
In the longer term, once the railway
connects with the planned wider GCC
railway, Oman’s ports could find them-
selves in a position where they are not
only playing a key role in boosting the coun-
try’s industrial sector, but also supporting
industries across the GCC. Goods could
be transported in and out of different GCC
countries by rail and then shipped on to other
markets through Oman’s ports. “It will move
us into even more of a competitive position,”
says Weerstand.
other ports in the region,” says Edwin Lam-
mers, executive commercial manager at Sohar
Industrial Port Company, the port authority.
“You will also see much of the cargo for Oman
that was going through Jebel Ali shifting back
to Oman.”
The port has already announced one major
contract in 2013, with Hong Kong-based
Hutchison Whampoa winning a $130m deal to
build and operate a new terminal at the port.
The new terminal will double the port’s capac-
ity to 1.5 million TEUs, from the existing
800,000 TEUs. Hutchinson is looking for a con-
tractor to carry out the civil works for the new
terminal and to commence construction. The
company aims to begin some operations at the
port by the end of the third quarter of this year,
or the beginning of the fourth quarter.
The new terminal will provide additional
capacity for the cargo and container traffic
being transferred from Port Sultan Qaboos in
Muscat. The Muscat port is being turned into a
tourism and maritime heritage facility and the
transfer of traffic is due to be completed by the
end of this year.
Increasing capacity
A new liquid jetty will also be built at Sohar in
2013 to support the predicted rise in liquid
cargo at the port. Contractors were invited to
prequalify for the project in January and will
be issued tenders in mid-May.
A reclamation scheme to create new land
to be used for industrial purposes will be
launched this year, with the tendering process
starting in mid-2013. In addition, the port is
looking to build a bulk terminal dedicated to
agro-commodities and food stuffs, with con-
struction set to be completed by mid-2014.
Further adding to Oman’s total port capacity
is the new Port of Duqm in the Al-Wusta area of
the sultanate. The port is due to be completed
by 2015, but is set to partially open some of its
quay wall in March this year. The berths are to
be used for break-bulk and project cargo. Duqm
port is part of a special economic zone authority,
which includes an industrial zone, a fishing
harbour, and tourist and logistic areas. It will
support the surrounding mining industry, but in
the broader term, it is hoped the port can capi-
talise on its geographic position and obtain a
share of the Gulf’s trans-shipment business.
“It will play a major role in the export of
refined and non-refined Omani minerals,” says
Reggy Vermeulen, commercial director at Port
of Duqm Company. “In the mid-term, it has the
potential to be a trans-shipment hub serving
Africa, Middle East and India trade flows. With
the port superstructure, industrial zone, and
road construction works still needing to be ten-
dered, 2013 will definitely be a tender year in
order to have everything ready by 2015.”
Consultants will be invited this year to con-
duct a study for the development of a major
liquid terminal at the port, which will be fol-
DPW006_Heart ad-Meed-58 mm x 186 mm_March2013.indd 1 3/5/13 2:35 PM
SOHAR PORT Container Throughput
TEUs=20-foot equivalent units. Source: Sohar Port Authority
200,000
150,000
100,000
50,000
0
2007
2008
2009
2010
2011
2012
(TEUs)
0
50000
100000
150000
200000
36-37 SR Oman.indd 37 14/03/2013 17:30