Diversification and FDI at centre of Oman’s new project launches

Several ventures spanning various sectors are in the pipeline, with many focusing on supporting the Sultanate’s sustainability efforts.  

The Oman Investment Authority (OIA) unveiled six projects aimed at bolstering economic diversification and attracting more investments. These ventures include the Duqm Refinery and Petrochemical Industries Company project, Duqm Integrated Power and Water Station, Ras Markaz Crude Oil Park, Khuwaimah Shrimp Farm, an electricity transmission project, and the JW Marriott Hotel Muscat, with a combined investment totalling OMR 4.65 billion.

The State’s Administrative Apparatus are set to inaugurate sustainable development projects valued at over OMR 650 million. These initiatives encompass the establishment of a production assembly station in the Greater Saqr area, a fishing jetty, a shipping and customs service station, infrastructure enhancements at the government dock in the port of Duqm, and other significant undertakings.

At the forefront of these initiatives, the Duqm Refinery and Petrochemical Industries (OQ8) project marks a pivotal step in transforming Duqm into a major industrial and economic hub. Comprising main processing units, storage and export facilities at Duqm Port, a crude oil storage facility in Ras Markaz, and an 81-kilometre (km) crude oil transmission pipeline, this project is the largest in the Duqm economic zone. With a daily production capacity of 230,000 barrels, the facility produces diesel, jet fuel, liquefied petroleum gas, sulphur, and petroleum coal.

The Ras Markaz Crude Oil Storage project, a vital component of economic diversification efforts, offers substantial storage capacity – up to 200 million barrels, with an initial phase capacity of 26.7 million barrels. This facility connects to the Duqm Refinery and contributes to Oman's oil export capabilities.

The Duqm Integrated Power and Water Project (DIPWP) is designed to meet the electricity and water needs of OQ8, attract investments to the Duqm Special Economic Zone, and provide essential services for heavy industry companies. With a capacity of 326 megawatts (MW) of electricity and 36,000 cubic metres of water per day, it also addresses future expansions in the Duqm Economic Zone.

The Khuwayma Shrimp Farm Project in South A’Sharqiyah contributes to food security and value-added industries. Spanning 200 hectares, the project's operational capacity is 4,000 tonnes per year.

Meanwhile, the JW Marriott Muscat Hotel will support the tourism industry. Featuring 304 rooms and suites, the hotel exemplifies sustainable tourism development, utilising natural resources, contributing to economic diversification, and generating employment opportunities for the national workforce, while contributing to Oman's GDP.

A BOON TO OMAN’S ENVIRONMENTAL AMBITION

Oman revised its target for reducing planet-warming greenhouse gas (GHG) emissions to 21% by 2030, up from the 7% pledged in 2021, as the Sultanate attends COP28, the UN Climate Summit taking place in Dubai.

The more progressive target is part of the updated Second Nationally Determined Contribution (NDC) report – a non-binding climate action plan that Paris Agreement signatories publish ever five years.

The NDC “builds upon a foundation of economy-wide targets and a revised base year (from 2015 to 2021), encompassing all domestic sectors, including land use, land use changes and forestry.”

The oil and gas sector contributed 22.9mn t/CO2 (millions tonnes carbon emissions) equivalent (CO2e) in 2021, around 26% of total emissions. Using 2021 as the baseline year, Oman envisages a 17% reduction in greenhouse gas (GHG) emissions by 2030 versus the business-as-usual scenario, and an 88% reduction in emissions against the same scenario by 2050. It plans to cut emissions through initiatives that include, among other things, carbon capture, use and storage (CCUS) technologies, and plans to power oil and gas projects with renewables.

The country also plans to build several utility-scale solar and wind renewable power projects to achieve its goal of producing at least 20% of its electricity from renewable sources by 2027. In addition, Oman is actively developing a green hydrogen industry and has signed several hydrogen and ammonia production and offtake agreements with foreign investors.

Meanwhile in December, the Ministry of Energy and Minerals and Hydrogen Oman (Hydrom) signed a joint study agreement (JSA) with the Port of Amsterdam, Zenith Energy Terminals and GasLog, to collaborate on the development of a liquid hydrogen route to market for green hydrogen produced in Oman and its export to the Port of Amsterdam and Europe.

GREEN STEEL FACTORYUNDER WAY

An integrated green hydrogen steel factory at the Special Economic Zone at Duqm (SEZD) has begun construction. The factory, set to be established by Vulcan Green Steel, a subsidiary of Jindal Shadid Steel Group, will boast an annual production capacity of approximately 5 million metric tonnes. This ambitious project is backed by investments exceeding USD 3 billion.

Scheduled for completion by 2026 and with production slated to commence in 2027, the facility aims to drastically reduce carbon dioxide emissions by approximately 85% below the current global average. The inauguration ceremony was conducted under the support of Dr. Ali Masoud Al Sunaidi, chairman of the Public Authority for Special Economic Zones and Free Zones (OPAZ).

Anticipating an annual reduction of 12 million tonnes in carbon dioxide emissions, the plant's capacity will shift from complete reliance on natural gas to a full embrace of green hydrogen. The project is poised to bring about a transformative impact on industrial operations while aligning with global sustainable practices.

RISE IN INBOUND TOURISM

The Ministry of Heritage and Tourism in Oman is actively promoting the Sultanate's heritage and tourism offerings with the involvement of 22 tourism companies and hotel establishments. The comprehensive programme of these promotional workshops encompasses visual presentations on the latest developments in Oman's tourism sector, bilateral and joint meetings, and collaborative discussions with representatives from Omani tourism institutions alongside their counterparts from Italy and Germany. 

Notably, the Omani delegation engaged in fruitful discussions with officials from the Republic of Italy, and a substantial 270 tourism institutions took part in the workshops. Focused on showcasing Oman's tourism experiences, particularly in heritage, natural, and adventure tourism, these workshops were aimed at familiarising the European market with the diverse components and offerings of Oman's tourism sector.

The Ministry of Heritage and Tourism is committed to elevating Oman's standing in foreign tourism markets by actively participating in prominent global tourism events, including exhibitions, workshops, forums, and related activities. Notably, the Sultanate has witnessed a remarkable increase in visitor numbers, reaching 2.9 million from January to September 2023, reflecting an impressive 43.2% growth compared to the same period the previous year.

In parallel, three-to-five-star hotels in Oman reported a surge in revenues, totalling OMR 155,670, signifying a robust 27.6% increase from the corresponding period in 2022. The number of guests in these hotels also witnessed a substantial rise, reaching 1,460 guests, marking a 29.2% increase from the same period last year. These positive trends underscore the successful efforts to boost Oman's tourism sector and raise its economic impact.