More Chinese investments in Duqm SEZ on anvil

By Conrad Prabhu — MUSCAT: April 22 - Having snagged commitments in excess of $3 billion in Chinese industrial investments in the China-Oman Industrial Park at the Duqm Special Economic Zone (SEZ), master developer Oman Wanfang LLC says it plans to line up further investors eager to leverage Oman’s geographical proximity to markets in the Middle East, Africa and south Asia. On Wednesday, Oman Wanfang LLC — which has a deal with the Duqm SEZ Authority (SEZAD) to develop and manage a sprawling 1,172-hectare site at the zone — inked sub-usufruct agreements with 10 Chinese firms that have together pledged $3.062 billion in industrial, petrochemical, utility-based, manufacturing, hospitality, fabrication and other investments.

A 150-strong contingent of Chinese dignitaries, investors, executives and officials turned out for the agreement signing, which took place in conjunction with the ceremonial breaking of the ground on the China-Oman Industrial Park at Duqm.

“This represents the first phase of investor commitments,” said Ali Shah, CEO — Oman Wanfang LLC.  “We hope to have more such signings on a continual basis, although we may not do it on the scale (and with the fanfare) that we see today.  Going forward, we hope to have agreement signings with individual investors.”

Speaking to the Observer, Ali Shah said last week’s agreement signings will signal the start of work on the infrastructure development of the industrial park.   “These 10 projects, which include a number of mega ventures, will require basic infrastructure before they can get started with their construction.  Once the infrastructure is in place, they will come here directly to start work on their individual projects.

In the meanwhile, they will undertake the pre-construction planning, design and other groundwork. They will also work on registering their companies in Oman.”

Asked about commitments, if any, by the Omani government to allocate natural gas for the gas-dependent ventures due to come up in the China-Oman Industrial Park, the official voiced optimism that the issue would be resolved by the time the proposed Duqm gas pipeline project is completed by the year 2019.

“We are hopeful that gas will arrive in Duqm by the end of 2019, and if we have supply commitments from the Omani government before then, (it will bode well for the early execution of some of our projects). However, as construction of these projects will usually take around two years to complete (there is still time to resolve the gas issue).”

However, as a fallback plan in the event that supply commitments from Omani authorities are not forthcoming, the industrial park will consider gas imports, he added.

Of late, the import of liquefied natural gas (LNG) is being weighed as a potentially viable option to help offset any short-term or long-term gas supply shortfalls.  The Duqm SEZ Authority as well as Port of Duqm have both alluded to the potential for LNG imports to meet gas demand — as a fuel resource for power generation as well as feedstock for petrochemicals.  State-owned Oman Shipping Company has said it can pitch in with a Floating Storage Regasification Unit (FSRU) to arrange for the transport, storage and regasification of LNG should there be takers for this service.

Notable among the gas-dependent projects signed up last week is an integrated methanol scheme and methanol-to-olefins (MTO) scheme entailing an investment of around $2.3 billion.  Plant capacity is envisioned at 1.8 million tonnes of gas-to-methanol and methanol-to-olefins in the first phase, expandable to an aggregate capacity of 10 million tonnes over several phases.

Likewise, gas is also presumed to be a requirement in the establishment of a 300 MW power plant that will meet the electricity requirements of tenants operating within the China-Oman Industrial Park.