Major fuel storage facility launching in Oman port

$75m strategic fuel storage depot coming up at Salalah Port.
Port of salalah, Ports, NEWS

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Salalah Port's growing importance as a logistics hub on the Indian Ocean is set to be further reinforced when a major strategic fuel storage facility comes into operation next year.

The multi-million dollar project, which will initially serve visiting naval ships and later be expanded to cater to merchant vessels as well, is being developed by Mina Petroleum, an energy services company that specialises in commodity trading and full-cycle logistics for delivery of petroleum products to remote regions and locations.

The Dubai-based group is investing about $75million in the construction of a 230,000 cubic metre storage depot in line with a contract award secured from the US government to supply fuel to its vessels calling at Salalah.

Construction work on the facility is well under way on a site adjoining the fuel depot owned and operated by Oman Oil Refineries and Petroleum Industries Company (ORPIC), according to a high-ranking company executive.

"Mina Petroleum is currently constructing its new facility in the Port of Salalah," said Graham O'Donoghue, group president & CEO, Mina Group. "All of the required regulatory permits and licenses, including environmental reviews, have been obtained. We have performed significant excavations on the land, which was rocky and initially unsuitable for tank foundations, and we have completed foundations for all nine tanks.

"Our fabricated steel is arriving this month for erection. Our client, the United States Defence Logistics Agency, has recently visited the site with a high-level delegation to see our progress.

Mina and the Port of Salalah are collaborating closely to deliver the project within the required time frame," O'Donoghue added in comments to UK newspaper the Observer.

Project plans envisage the construction of nine large fuel storage tanks that are connected to the Port's new liquid jetty via a pipeline network and a series of pump stations. Mina will be the first of the Port's tenants to use the new liquid jetty. The Mina complex also includes an administrative building, maintenance workshop, and fuel lab, among other facilities.

Salalah's proximity to the Red Sea, as well as a number of important east-west shipping lanes, made it ideally suited to host a strategic fuel storage depot of this kind, according to O'Donoghue.

"The key considerations were Salalah's strategic location and Oman's growing economy. The location is perfect for a fuel supply point that does not require vessels to enter the Arabian Gulf via the Strait of Hormuz. Salalah has great potential, especially in light of the port's '2020 Vision', which is an ambitious expansion plan that will take advantage of its strategic position in the region," he said.

As with the Group's investments elsewhere around the world, the Salalah project is expected to contribute significantly to the local economy, O'Donoghue pointed out.

"Our project is a large capital investment in a facility that will have a thirty to forty year life span in Salalah. Financed by Bank Muscat, our project will also contribute to the financial sector of Oman's economy. The project also involves many Omani subcontractors and service providers, including legal services, hospitality, transport, housing, telecom and financial services."

He said the Group plans to build on its investment in the Sultanate by adding a second fuel depot within the port. "Salalah is ideally located and the economy of Oman is growing, so Mina intends to invest in a second facility here at the Port. At this facility, which will be adjacent to the one currently under construction, Mina will build a number of storage tanks for a variety of refined products and possibly crude as well," the executive explained.

Further, in addition to recruiting and training local Omanis for jobs at the facility, Mina also plans to roll out an energetic social investment programme targeted at local communities.

"Most importantly, of course, the depot will provide jobs in the Dhofar Governorate. In addition, Mina is exploring a number of options for corporate social responsibility, including sewage treatment and water purification infrastructure in rural Dhofar communities, technical training programmes for local students in fuel facilities operations and maintenance, investment in local education and recreation activities."

Mina Group owns, operates, and invests in energy infrastructure assets to optimise its supply chain and commodity trading operations. The Group has sourced over one billion gallons of fuel from diverse markets and transported that fuel across thousands of kilometres by sea, rail, road and pipeline.

The Salalah strategic fuel storage project is due to come on stream in the second half of 2015.

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