Oman's Ras Markaz crude storage outside the strategic Strait of Hormuz will come onstream by the end of the second quarter of 2022 with an initial capacity of 26.7 million barrels, which could be later increased depending on demand from investors, state-run Oman News Agency reported Dec. 29, citing an official.
Infrastructure to store crude at Ras Markaz in Duqm on the southern coast of Oman is already complete, Salim al-Hashmi, project general manager at developer Oman Tank Terminal Co. told the news agency.
Oman, the Middle East's biggest oil producer outside OPEC, exports its crude via the Mina al Fahal terminal in the Persian Gulf, but having a second export facility at Ras Markaz can help the country deal with surplus production, officials told Duqm Economist Magazine in a quarterly issue in July.
The Duqm Special Economic Zone and port is the site of several energy infrastructure projects under development and construction.
The storage park also can be a source of oil from Duqm refinery, which will be connected to the facility with an 80-km long pipeline and eight tanks built to store the refinery's crude.
Ras Markaz will receive oil by sea through ships that will pump oil to the facility through pipelines extending to 7 km at sea and 3.5 km on land and the facility may be connected to Oman's oil fields in the future, Ard Van Hoof, CEO of Oman Tank Terminal Co. told the magazine.
The 230,000 b/d Duqm refinery is a 50-50 joint venture owned by state-owned energy company OQ and Kuwait Petroleum International (Q8), called Duqm Refinery and Petrochemical Industries Co. (OQ8).
The trading arm of Saudi Aramco signed in December an agreement with OQ to explore the potential supply of feedstock to the Duqm refinery and petrochemical project.
Under the non-binding memorandum of understanding, Aramco Trading Co. and OQ "intend to collaborate directly or through their affiliates on exploring business prospects in the Omani port of Duqm and nearby crude oil storage terminal of Ras Markaz," OQ said in a Dec. 6 statement.
"The parties will undertake a joint review of ATC supplying feedstock to Duqm Refinery & Petrochemicals Industries Company LLC (OQ8), as well as possible offtake of oil products by ATC from OQ8," OQ said.
Both companies may expand the scope of the MOU to include renewables, waste stream, green ammonia as well as green hydrogen, according to OQ.
Duqm refinery is expected to come online in the first quarter of 2023, the head of project management at the facility told ONA on Oct. 30, as the Gulf country seeks to process crudes other than its own.
Construction of the refinery is 87% complete, Yousuf Al-Jahdhami told the agency at the time. The refinery will mainly produce diesel, jet fuel, naphtha and LPG, he said.
The refinery, which will cost more than $8 billion, has faced numerous delays since construction started in 2018.
Saudi Basic Industries Corp., the biggest petrochemical maker in the Middle East that is 70% owned by Saudi Aramco, and OQ also signed a memorandum of understanding in December to study the development of a petrochemical project in the Duqm free zone.