The agreement was signed by Sezad chairman H E Yahya al Jabri and on behalf of OTTCO by Eng Isam al Zadjali, CEO of Oman Oil Co, and Said al Maawali, director of OTTCO, according to a press release issued by Sezad. OTTCO is a subsidiary of Oman Oil Co.
The establishment of Ras Markaz crude oil storage terminal, which falls under Oman’s economic diversification plan, will help the sultanate to become an international centre for the storage of crude oil and its derivatives. Moreover, the new terminal will help Oman find an additional port for the export of crude oil.
Located 70km south of Al Duqm Centre, the total area allocated for Ras Markaz crude oil storage terminal is 1,253 hectares which is deemed convenient for high storage capacities.
The agreement grants OTTCO exclusive rights for the storage of crude and its derivatives in Ras Markaz area for a period of 20 years and for five years in Sezad as a whole provided that no other company will be permitted to establish or carry on any similar activity.
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 and its derivatives; establishment of floating platforms and piers for the import and export of crude and its derivatives; pier for the tugboats under water pipelines to receive and export oil with lengths ranging from 5km to 7km.
The plan will also cover 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.
As per the agreement, the storage capacity of the terminal during phase I will be 26mn barrels and it will be executed over a period of ten years commencing as of the date of contract signing. The company will gradually increase its capacity as per the growth in demand.
OTTCO will be committed to develop all five phases either on its own or via investment consortium or by means of soliciting and utilisation of third parties’ investments.
Total phase I investment is expected to reach US$1.75bn comprising US$815mn to cover the costs for crude oil tanks and US$941mn for the construction of marine and other infrastructure facilities. Investments for phase II is expected to be around US$700mn for storage tanks and US$225mn for building basic infrastructure facilities.
OTTCO also estimated the investments required for the remaining three phases to be around US$700mn for the construction of storage tanks for each phase and approximately US$381mn for basic infrastructure facilities required for each phase.