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Oman continues to develop itself into a regional powerhouse for the shipping and transhipment of dry bulk goods such as iron ore To this end a new port is being constructed at Duqm and a new cargo terminal at Salalah The new Duqm port will also boast a new oil refinery Further port developments include the announcement that all cargo operations are to be moved from the Muscat port of Sultan Qaboos to Sohar by the end of 2012

All of this is aided by Oman's position on the Arabian Sea, outside the Persian Gulf, enabling it to offer shorter shipping lines than ports within the congested body of water This has led BMI to forecast particularly strong growth at the Port of Sohar in 2012 This will be supported by the promotion of the port by container shipping companies

Headline Industry Data

- 2012 container throughput at Salalah forecast to reach 3 93mn twenty-foot equivalent units (TEUs) on growth of 2 2%, and to average 1 4% to 2016

- 2012 total tonnage throughput at Sohar forecast to reach 13 64mn tonnes, a year-on-year (y-o-y) growth of 12 2% Growth forecast to average 14 8% over the mid term, boosted by the transfer of Sultan Qaboos' cargo operations to the facility

- 2012 Oman total trade real forecast at 3 3%, and to average 2 0% per annum to 2015 Key Industry Trends

Salalah Set For Growth As Contract Awarded

BMI believes that the Omani Port of Salalah is set for significant growth as the contract for the development of its new general cargo terminal and liquid jetty is awarded Given the scale of the work, BMI does not believe that it will be completed during our forecast period (to 2016), and so we are not revising up our forecasts for the time being Once the new terminal is operational, however, we believe that tonnage volumes at the port will increase significantly

OSC Takes Delivery Of VLCC Bukha

In April Oman's state-owned Oman Shipping Company (OSC) took delivery of a very large crude carrier (VLCC), Bukha, from South Korea's Daewoo Shipbuilding & Marine Engineering The vessel's addition has taken the total number of carriers operated by OSC to 35, including 14 VLCCs It has a total cargo capacity of 317,000 deadweight tonnes and will be technically managed by Dubai-based International Tanker Management The new VLCC will be deployed in the Singapore-based VL8 Pool

Proposed Duqm Refinery Boosts Downstream Export Prospects

The construction of a 230,000b/d refinery in the city of Duqm, Oman, should help Muscat secure its position as a net products exporter The establishment of a new downstream hub, combined with the construction of a new harbour in the same city, could help the country break into the liquids bulk market Worries over ballooning costs, which are still in line with regional norms, are likely to be negated by the numerous advantages offered by this plan

Key Risks To Outlook

On the downside we stress that for the foreseeable future, Oman's economy will remain highly reliant on oil revenues We caution that should prices record a more pronounced drop before the economy has been adequately diversified away from the energy sector, our positive outlook might prove overly optimistic

Additionally, the autocratic nature of the political regime in Oman (and elsewhere in the Gulf) will ensure that risks of an uptick in protest activity by pro-democracy demonstrators will remain elevated, which would generate uncertainty and in turn deter investors away from the market

However, should political violence spread in the Gulf region it could also provide upside risk to Oman - so long as it does not affect the country itself - as it sits outside the Straits of Hormuz and could provide an attractive option for shipping companies unwilling to pass through the strait This could boost transhipment volumes at Omani ports such as Salalah at the expense of those situated on the Gulf, such as Dubai's Jebel Ali Equally, the ongoing investments in the development of Oman's ports, in particular in developing its dry bulk export capabilities, offer upside risk also

Click for Report details:Oman Shipping Report Q3 2012