Oman’s Sohar Port targets expansion in 2013

30 January 2013

Sohar Port wants to attract cargo away from region’s leading ports

Oman’s Sohar Port is readying to announce a string of contracts in 2013 as it looks to compete with ports such as Dubai’s Jebel Ali.

“Due to its location, Sohar has so much potential to attract cargo from the UAE; from Jebel Ali, for example, from Fujairah and other ports in the region,” says Edwin Lammers, executive commercial manager at Sohar Industrial Port Company. “You will also see much of the cargo for Oman that was going through Jebel Ali shifting back to Oman.”

The port has already announced one major contract in 2013, with Hong Kong-based Hutchison Whampoa winning a $130m contract to build and operate a new terminal at the port earlier this month.

The new terminal will double the port’s capacity to 1.5 million 20-foot equivalent units (TEUs) from the existing 800,000-TEU capacity.

Hutchinson is now in the process of looking for a contractor to carry out the civil works for the new terminal and to commence construction. This process is expected to happen relatively quickly, as post-panamax cranes have already been ordered for the new terminal and are due to be delivered in mid-2013.

Hutchison aims to begin some operations at the port by the end of the third quarter this year, or the beginning of the fourth quarter.

The new terminal will provide additional capacity for the cargo and container traffic being transferred from Port Sultan Qaboos in Muscat. The Muscat port is being turned into a tourism and maritime heritage port and the transfer of traffic is due to be completed by the end of this year.

Sohar Port will also be constructing a new liquid jetty at the port in 2013. It invited contractors to prequalify in January and will be looking to issue tenders for the project in mid-May.

A reclamation scheme that will create new land to be used for industrial purposes will also be launched this year with the tendering process starting in mid-2013. In addition, the port is looking to build an agro-bulk terminal dedicated to agro-commodities and food stuffs, with the terminal set to be completed by mid-2014.

The first phase of the port’s free zone development is set to continue to attract businesses, with approximately 380 hectares of land are leased or committed. Phase 2 of the freezone development is expected to start within the next 18 months at least.

These plans to significantly increase capacity mirror plans of other regional ports, potentially raising the possibility of a port overcapacity issue in the GCC in the coming years.

Sohar’s position on the Gulf of Oman, outside of the politically sensitive Strait of Hormuz, will give the port its competitive edge, according to Lammers.

“I don’t think Sohar Port will suffer from overcapacity issues. There is ample capacity in the region, but you need to look at the location as well. One might argue you do not need two large terminals just 20km distance from each other. There might be a need for 40 million TEUs in the region, but not next to each other,” Lammers says.

Sohar Port is already seeing increased throughput volumes. Its 2012 results show an increase of 51 per cent in total throughput. Container throughput increased by 83 per cent to 1.9 million TEUs, while cargo, including dry, break and liquid bulk, increased by 50 per cent, to 41.94 million tonnes.

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