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).

While the vessel itself will be operated by OSC, scheduling and nomination for the loading of crude oil will be managed by PDO. Ship-to-ship (STS) transfers will be executed by Fendercare Marine, an international specialised STS firm.

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.

Nasser Al Jashmi, Deputy Chairman of Dubai Mercantile Exchange (DME), said: “The floating storage facility will deliver improved convenience to customers of Oman Export Blend oil, and stands as a brilliant testimony to the Sultanate’s commitment to create a better, more efficient oil trading environment.”

“With the launch of this facility, buyers on DME will now have access to a world-class oil storage hub that gives them unprecedented flexibility and control to capitalize on favourable market conditions. We congratulate OTTCO on this landmark initiative which will dramatically augment the capacity for storage and exports of the Oman blend,” he added.

Salim Al Aufi, Undersecretary of the Oman Ministry of Oil & Gas, added: “Linking floating storage to energy future contracts is what makes this project unique; with the commencement of this project we aim to support the positive growth trend demonstrated by DME by introducing a new tool as well as creating value for Oman crude oil customers.”

Hilal Al Kharusi, Chairman of the Board of OTTCO, concluded: “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 benefitting Oman’s crude oil market. I would like to thank the Ministry of Oil & Gas and the project stakeholders for their continuous support for the project,” he added.

Commenting on the announcement of the successful bids, Said Al Maawali, Project Director, OTTCO, said: “We are delighted to announce the award of our floating storage facility at Mina Al Fahal. Ahead of the commissioning of the Ras Markaz Crude Oil Park, this is an ideal option for customers seeking to store Oman Export Blend in a strategic location on the Indian Ocean coastline. The OTTCO team has worked in partnership with MOG, OSC, PDO and DME to bring this project to the market, and I am proud to say that our joint efforts have now come to fruition.”

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 1,600 HA in Oman’s Al Wusta region, approximately 70-km south of the Duqm Port.