Abu Dhabi: The Port of Duqm, in the Wusta region on the southeast coast of the Sultanate of Oman, is expected to be an alternative export route for Gulf oil that can bypass the strategic Straights of Hormuz, economists told Gulf News on Sunday.
Mohammad Asoomi, a UAE-based economist, said the Dh16.6 billion port will play a complementary role for other regional seaports.
“This port will help Omani economy for sure because of Oman’s strategic location on the Indian Ocean. This will help the country in the re-export businesses and improve the economic activities in Oman,” he said.
The new port also will help diversify Oman’s economy, its transport infrastructure and logistics and boost job creation, Asoomi added.
Asoomi said he did not think that port would be a threat to UAE or GCC ports.
“The economies of the region are booming and this is a normal measure, to have this port to serve the country which has a 2020 strategic vision to be an industrial and logistic hub for businesses,” Asoomi told Gulf News.
The Duqm port, a 50/50 joint venture joint venture between the Government of Oman and Consortium Antwerp Port, is located 1400 kilometres away from the Strait of Hormuz, the sole water passage into the Gulf. Iran has frequently threatened to close the strait.
“We all know that more than 30 per cent of oil shipments pass through the Strait of Hormuz and with this shift via the Port of Fujairah and the Duqm port, the GCC countries will ensure that their oil shipments are safe, and this will decrease the risk and the cost of insurance on ships,” said Amer No’man Ashour, chief analyst and economist at CNBC Arabia.
Kuwait, Qatar, the UAE and Saudi Arabia all send oil through the Strait of Hormuz.
“Al Duqm Port is one of the best ever solutions to the oil issue ... It is 800 kilometres away from UAE borders. We know that the UAE has had a partial solution via Fujairah with a capacity of 1.1 million barrels per day, but the production of the UAE is almost 3 million barrels per day. Most of Kuwait, Qatari and Saudi oil is produced in the eastern parts of the Gulf area and this new Omani port will be very suitable for exporting oil to the world,” he added.
“As long as Iran is proceeding with its nuclear plants, economic embargo will be imposed on the country which in turn will keep threatening to shut down the Strait. The Duqm Port will be a very good option to avoid such threats to ensure that Iran will not rattle the oil market with its menaces,” Ashour said.
Peter Broers, CEO of the Port of Duqm, said that the port will also handle container and break-bulk ships, hydrocarbon tankers and high-speed ferries.
“The new port will allow trans-shipment outside of the Arabian Gulf, saving five days in transit time and thousands of dollars in oil,” said Broers.
He added that the port will be a hub for trade between the GCC, the Red Sea, the Far East, South-East Asia and East and South Africa, and will include a new airport, infrastructure, warehousing services and lodging.
Broers said that the Duqm Port was designed to be able to big vessels up to 180,000 deadweight tonnage.
“However, the main challenges are that Oman’s maritime does not have big shipping or container lines,” Broers said.
“The new port will be targeting big vessels from India and Pakistan and Africa because the port is designed with a draft of 18 metres and the channel with 19 metres deep. It will be a business hub for these countries as it is strategically located on the Indian Ocean,” he said.
The Duqm Port will also accommodate a petrochemical factory, a refinery, an airport, beach-front hotels, and provide housing for more than 100,000 people.