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Ras Markaz Project to Seek Global Funds

Source: Oman Observer 4/30/2016, Location: Middle East

The construction of the first phase of Ras Markaz Oil Storage Terminal which involves the project’s infrastructure will cost anything between $300 to 400 million. This was stated by Dr Mohammed bin Hamad al Rumhy, Minister of Oil and Gas, Chairman of Oman Oil Company (OOC), during an inspection visit to Ras Markaz.

Dr Rumhy noted that the construction of the oil storage terminal in Ras Markaz came in implementation of the directives of His Majesty Sultan Qaboos which stressed on setting up a strategic oil inventory.

Following the issuance of the Royal directives, the Ministry of Oil and Gas, in cooperation with Oman Oil Company (OOC), studied a number of locations for the construction the oil storage terminal and found Ras Markaz to be the most suitable location that would achieve the strategic and economic objectives attached to the project.

The first phase of the terminal will commence with a capacity of between 6 million and 10 million barrels, but could be expanded in the future to handle larger quantities up to 200 million barrels.

Ras Markaz which is situated some 70 km from Duqm was annexed to the Special Economic Zone in Duqm as per Royal Decree 5/2016 issued on January 28, 2016.

The Ras Markaz Oil Storage Terminal project will be implemented by Oman Tank Terminal Company (OTTOC), a subsidiary of OOC, Dr Rumhy said. Dr Rumhy also confirmed that international companies have demonstrated strong interest to utilise Ras Markaz as a hub for oil storage.

Speaking about the OOC’s funding plan for the project against the backdrop of falling oil prices, the minister said low oil prices is one challenge, however we are not going to rely on the state budget to fund the project as the project needs global financing in the conventional way by taking bank loans.

“We are not dependent on state budget to finance the Ras Markaz terminal project or Duqm Refinery. The plan of OOC is to finance its projects by directly borrowing from banks and international banking institutions,” the minister said. OOC will continue to develop the project and increase the number of tanks, in line with the increasing demand for oil storage facilities. Dr Rumhy hoped that Ras Markaz would emerge as one the world’s largest oil storage hubs.

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