Gulf Construction Online - Industrial hub

Oman

Industrial hub

01 February 2009

An ambitious joint venture project embarked upon by Oman and the Port of Rotterdam in 2002 has resulted in the creation of one of the world’s largest port developments.

Within a span of six years and with investments exceeding $12 billion, the Port of Sohar has become a flourishing maritime hub, where a number of major petrochemical and industrial projects are either already operational or in various stages of development.
The port is now moving toward the next phase of expansion with the planned construction of a pelletising plant and iron ore distribution centre by Brazilian mining giant Vale, a special economic zone, and an independent aggregate terminal.
In addition, a modern airport, new expressway and a possible railway link connecting Muscat with Sohar port are also amongst the development plans, according to Sohar Industrial Port Company (SIPC), which was founded to spearhead the project.
SIPC Jetty at a glance

Iron ore distribution centre
Elaborating on the iron ore distribution facility, SIPC’s manager special projects Edwin van Espen, says: “Vale, the largest iron ore company in the world, will bring iron ore from its ports in Brazil to Sohar in ultra-large ore carriers. The firm is now developing the next generation of 400,000 dwt iron ore carriers, which will also call at the Port of Sohar.”
The pelletising plant in Sohar will produce steel pellets for the region and will also function as the distribution centre for iron ore to be exported to the Middle East, India and Africa.
Commenting on the choice of Sohar for the facility, he says: “The main reason for establishing the plant and production centre in Sohar is its strategic location outside the Strait of Hormuz. Another advantage is that Oman is a country with an excellent business environment.”

Timeline for expansion
The pelletising plant and the distribution centre would be connected with the rest of the world by a large deepwater jetty, the infrastructure for which is being developed by Oman and the Port of Rotterdam.
The 600-m-long jetty platform, connected to the shore by a 700-m-long trestle, consists of an import location of 400 m and two export locations with a total length of 600 m. In addition, the depth of the existing approach channel will be increased from 18.5 m to 23 m and a new harbour basin will be created with a berthing pocket of 25 m in front of the jetty. Tenders for the jetty will be issued in the first quarter of this year with a contract award expected in the second quarter to enable work to commence immediately.

Aggregate terminal
Another project under development is the establishment of an independent aggregate terminal. The project aims to exploit the huge potential for export of aggregate to the Gulf region from the several operational quarries in the vicinity of the Port of Sohar that currently supply the local market.
Export of aggregates is planned to start during the second quarter of this year and is expected gradually increase over the coming years.
“This apart, several other industries have expressed interest in establishing plants and/or terminals in the Port of Sohar,” he points out.

Special Economic Zone
For downstream activities and other plants that do not require to be in the port itself, a special economic zone – the Sohar Special Economic Zone (SSEZ) – is under development just south of the port area, following the recent go-ahead given by the Omani government for its development plans.
“The zone, which is more than twice the size of the port in terms of land area, will have the government of Oman and Port of Rotterdam as the main shareholders, while another strategic partner from India will be announced shortly,” van Espen states.
The SSEZ will be developed in the vicinity of the already-established Port of Sohar and will provide quality infrastructure services, enabling the investments there to be more competitive, he adds.
An initial area of 500 ha has already been planned and is available for leasing. A number of prospective customers have been identified for this phase.
Elaborating on the business targeted for the zone, van Espen says: “The SSEZ aims to attract SMEs (small and medium enterprises), some of which are related to the industrial development at the Port of Sohar. These include downstream petrochemicals and metals such as steel industries. In addition, the SSEZ is planning to attract investments in value-added logistics. As a result, the Sohar Industrial Port area will be strengthened and further economic growth and more job opportunities will prevail.”
“The SSEZ is planned to be in the heart of a greater industrial zone encompassing the port, highways to the UAE and Muscat, a future airport and a planned expressway/railway. The integration of these multi-modal transport elements will allow the SSEZ to play a strategic logistical role in the region,” he adds.
In addition, the SSEZ will offer a package of regulatory incentives as well as a one-stop-shop service for new investors.

History
Tracing the origins of the Port of Sohar and the advantages it offers, van Espen says: “In 2002, the government of Oman and the Port of Rotterdam formed a joint venture on a 50:50 basis, to develop and manage the Port of Sohar. Sohar Industrial Port Company was thus founded with its main role being to attract and develop business, lease out land to various industries, facilitate port and other common services and utilities and develop infrastructure.
“The concession granted to SIPC initially covered an area of 2,000 ha, which was expanded to 6,000 ha in 2007; while the term was extended from 2027 to 2043.”
“The port is now operational and served by world-renowned companies for operation of its terminals and has a modern infrastructure and deep draft harbour (to -18 m) initially developed by the government.
“The world-class facilities and deep water have made the port an ideal gateway serving the Gulf region and the Indian subcontinent for maritime cargo. An excellent road network connects the port to the rest of the country and to the UAE.
“The port is strategically positioned to attract mega-container ships that offer services within the region and around the world and are eager to seize every opportunity to gain time on their rotations – avoiding a trip into the Gulf and benefiting from the facilities of a thoroughly modern port that enjoys connections with many countries are a considerable advantage.”
The industrial port operates from three clusters; petrochemical, metallurgic and logistics. The petrochemical cluster consists of a refinery and production plants for aromatics, formaldehyde, methanol, polypropylene and urea. The metal cluster includes an aluminium production plant and a steel complex.
The port is the centrepiece of the Greater Sohar Port Area. Some of the prominent investments in port-related services include the Oman International Container Terminal (OICT), a joint venture between Hutchinson Port Holdings (HPH) and the Government of Oman; the general cargo terminal operated by a joint venture between Steinweg of the Netherlands and three Omani investors; and the liquid terminal with common storage facilities operated by a joint venture between German company Oiltanking and Norwegian Odfjell.
Within the Greater Sohar Industrial Port Area is the 220-ha Sohar Industrial Estate with small- and medium-sized industries, mostly geared to serve the Oman market.