ONE of the most exciting new investment opportunities in Oman is at the Duqm Special Economic Zone (SEZ), with a prime location, political stability, natural resources, exceptional topography, and breathtaking scenery, making it an excellent choice for business and tourism.
Strategically located, Duqm SEZ stretches over an area of 1,745 square metres alongside 70km of coastline on the Arabian Sea. Not only is it one of the largest economic zones in the Middle East and North Africa (MENA); but it is also among the largest and most significant in the world.
Duqm has a prominent location facing the Arabian Sea, where investors can gain access to high-density population markets in India, Pakistan & Bangladesh and penetrate different markets. Most international trade routes pass close to or through the port, making it a gateway to the Middle East, North and East Africa, as well as South Asia.
Duqm is well-positioned to become a regional shipping terminal and a logistics gateway, providing ample opportunities for potential investors. Duqm's location makes it well-suited as a logistical supply gateway for Gulf Cooperation Council (GCC) states and is a significant breakthrough in achieving GCC economic integration, due to its multi-modal connectivity system comprising sea, air, road network and upcoming inner rail network.
Over 70 per cent of the world's seaborne petroleum is transported along the coast of the Sultanate of Oman through the Indian Ocean and on to the Pacific. One of the biggest recent investments has been Oman Tank Terminal Company's (OTTCO) launch of a new floating storage facility, with a 2.1 million barrel capacity at Mina Al Fahal.
The facility, built by the subsidiary of Oman Oil Company (OOC), is designed for global customers of Oman Export Blend. Three customers - China Oil, Glencore and Oman Trading International (OTI) - have won bids for access to the facility on board a very large crude carrier (VLCC), which will be provided and operated by Oman Shipping Company (OSC).
OTTCO's floating storage facility, which was initiated and supported by Oman's Ministry of Oil & Gas (MOG), has been developed in partnership with OSC, Petroleum Development Oman (PDO) and the Dubai Mercantile Exchange (DME).
The initiative makes OTTCO the first storage company in the world to provide floating storage linked to an energy futures contract. This initiative also makes DME the first exchange in the world to incorporate floating storage at delivery point for customers, thereby supporting the trading of DME Oman crude oil futures on the exchange while strengthening its strong trading ecosystem to create more efficiencies. This new facility will also enable buyers on the DME to store their oil and optimise market circumstances to their benefit giving them additional flexibility. Moreover, the storage facility will enable buyers to face any unforeseen circumstances by providing a viable storage option for the oil they have purchased.
OTTCO chairman Hilal Al Kharusi said: "OTTCO's floating storage facility is an important step in the introduction of our organisation to the global oil trading community, and the strong interest that we have had from bidders has been encouraging. As we continue to make progress towards the development of Ras Markaz Crude Park, I am pleased to say that we are already serving the needs of our crude oil customers. This is an exciting time for OTTCO, and we expect the floating storage facility to add value to Oman Export Blend as a benchmark, as well as directly benefiting Oman's crude oil market."
OTTCO's floating storage facility has been introduced as an interim storage solution for select customers ahead of the commissioning of Ras Markaz Crude Oil Park. Once complete, the facility will cover an area of approximately 1,600ha in Oman's Al Wusta region, approximately 70km south of the Duqm Port.
In addition to its rich oil and natural gas resources, the area surrounding Duqm also has minerals in commercial quantities such as limestone, silica sand, laterite, basalt, solar salt, and much more. These deposits can be mined, processed and exported out of Port of Duqm. The abundance of marine resources along the Al Wusta coast also makes Duqm a distinct and ideal location for fish processing, aquaculture, and related activities.
Subdivided into multiple clusters, Duqm SEZ includes the Port of Duqm and dry dock, refining, heavy industry, petrochemicals areas, fishing port and fish industries complex, Duqm airport, logistics services area, tourism area, light, and medium manufacturing, commercial, educational services, health care, and residential areas.
There are various opportunities for investment across a wide range of markets with adequate capacity to undertake various projects, and opportunities to select from segments such as sports facilities, mining, real estate development, shopping centres, private universities and institutes among others.
Duqm SEZ offers an exceptional value proposition for investors, coupled with business support, such as 100 per cent foreign ownership, no customs duty, zero per cent income and corporate tax, 30 years renewable tax exemption from the date of initiating the business, renewable lease agreements up to 50 years, and no currency restriction.
Duqm multi-purpose port, with berths to handle high-load vessels, plays an essential role in stimulating the advancement of the Wusta region. It is an entry to the global market, consisting of two 8.6km breakwaters, a commercial berth of 2.3km, with a depth of 18 metres and an approach channel 19 metres deep.
In the next two decades the port's volumes are expected to reach around three million TEUs of containers, 10 million tonnes of dry bulk and 25 million tonnes of liquid bulk by the year 2035. In addition it has shipyard facilities including the second largest in MENA, which is operated by Daewoo Shipbuilding, and Marine Engineering (DSME).
Duqm Airport is designed to accommodate all types of aircraft, including those handling large passenger numbers with a capacity of 500,000 travellers per year and air cargo loads with an initial 50,000-tonne capacity. The growth in the number of businesses, employment opportunities, tourist arrivals and newly located residents in the zone is expected to generate a flow of half a million passengers per year and half a million tonne of cargo over the coming two decades.
Several mega-investment projects have also been attracted to Duqm's port facilities, including the development of an oil refinery and petrochemical complex with a production capacity of 230,000 barrels per day, and the construction of a 250km, 36-inch-wide pipeline to transport natural gas to Duqm industries from Saih al Nahiyda in Central Oman. The zone is expected to attract US$12.6 billion in industrial investments, which will be mainly in the form of industrial clusters centred on petrochemicals, iron & steel, aluminium, and the mineral resources of the Al Wusta Governorate.
Additionally, Duqm is one of Oman's flagship tourism projects, quickly turning into a hot destination for tourists and investors. It offers diverse attractions including an 18km coastline of beautiful sandy beaches, with hotels, guest houses and chalets overlooking the Arabian Sea.
Key tourism projects so far include the Crowne Plaza Hotel, the Park Inn Hotel and City Hotel. The total supply of hotel rooms is expected to reach 2,500 rooms in the four and five-star category. The number of tourist arrivals is expected to reach 250,000 a year.
The Duqm SEZ project is one of the most ambitious developments in Oman and is on its way to becoming a world-class facility for both investors and tourists. With the booming development catching the attention of global investors, Duqm looks set to flourish.