Oman will spend between $300m to $400m to build the first phase of an oil storage terminal on its southeastern coast, the sultanate’s Oil and Gas Minister Mohammad bin Hamad al-Rumhy has said.

The terminal will built by Oman Tank Terminal Company (OTTCO), a subsidiary of state-owned Oman Oil Company (OOC), at Ras Markaz, about 70 kilometres from Duqm, where the government is developing a logistics hub port and industrial zone.

The terminal will be built through borrowings from local and international banks, instead of government finances, local newspaper Times of Oman quoted Al-Rumhy as saying during a visit to the terminal site.

The first phase of the scheme will have a crude storage capacity of between 6-10 million barrels, which could be expanded in the future to store larger quantities of up to 200 million barrels.

Al-Rumhy did not give a timeline for construction of the project.

Oman is currently shortlisting bidders for a tender to build the Ras Markaz terminal, sources familiar with the project told MEED on 25 April.

Prequalification for the engineering, procurement and construction (EPC) tender is expected to be completed later in the second quarter of 2016, having been delayed from the second half of last year. The request for prequalification was sent in June 2016.

The front-end engineering and design (feed) study was carried out by UK-based Amec Foster Wheeler.

Ras Markaz was initially planned to be completed by 2017, according to previous announcements by OTTCO management.

OTTCO is a joint venture of state-owned Oman Oil Company (OOC) and the local Takamul Investment Company.