The response to an invitation to submit Expressions of Interest (EoIs) for the FEED and PMC packages has been “significant”, underscoring the strength of international interest in this strategically important venture, it is learnt.

The EoIs represent the start of a prequalification process leading to the selection of suitable consultants who will be invited to participate in the FEED and PMC contracts when tenders are eventually floated.

The Oman Tank Terminal Company LLC (OTTCO), a joint venture between the wholly government owned energy investment vehicle Oman Oil Company (90 per cent) and its downstream investment subsidiary Takamul Investment Company SAOC (10 per cent), is establishing the facility, named ‘Ras Markaz Crude Oil Park’, at a seafront location some 70km south of Port of Duqm on the Wusta coast.

OTTCO is looking at a phased development of the terminal, which at full capacity will hold around 200 million barrels of crude, effectively making it one of the largest oil storage hubs in the world. Additionally, the facility will serve as an alternative to the Sultanate’s only crude export terminal at Mina al Fahal in Muscat.

A detailed prefeasibility study of the oil storage facility is currently underway — an exercise that will help provide an estimate of the cost of building the terminal, laying a pipeline from Saih Nihayda in central Oman to Ras Markaz, and installing all associated marine facilities for the loading and unloading of crude.

The relative cost of shipping Omani crude out of Ras Markaz versus Mina al Fahal will also be a key consideration in the overall strategic decision to proceed with the next phase of its implementation, it is learnt.

Although conceived as a hub for the strategic and commercial storage of crude oil, the Ras Markaz facility will also serve as Oman’s second export terminal, say officials. Towards this end, an oil pipeline will be built connecting the Main Oil Line at Nihayda with the proposed terminal at Ras Markaz.

OTTCO, say officials, is confident of generating the critical volumes of Omani crude oil necessary to justify the cost of investing in alternative oil storage infrastructure at Ras Markaz before the company begins to earnestly market the terminal overseas.

After all, domestic volumes — and not outside volumes per se — are key to driving the initial success of the project, officials stress.

Additionally, there is strong optimism that Ras Markaz’s location will appeal to overseas parties looking for strategic storage capacity outside the sensitive Arabian Gulf and Hormuz Strait.

Shipping oil from Ras Markaz to Europe and the Far East, as well as the burgeoning markets of the African east coast, offers significant strategic and economic advantages over, say, Fujairah, it is pointed out.

Another major plus is Ras Markaz’s natural deepwater, which will allow for supertankers and ultra large crude carriers (ULCCs) to load and unload their oil cargoes at this location. Single buoys moorings (SBMs) are seen as just ideal for the handling of bulk volumes, such as crude oil.

It is understood that OTTCO will be looking at an initial capacity of 20 – 25 million barrels, with further expansions dependent on market demand. The first phase is set to be operational by around 2017.