China-Oman Industrial Park at Ad Duqm

Ad Duqm was once, only a few years ago, a small village with a couple of shops, an equal number of local restaurants and it was a cash economy with not even a bank. However times have changed and Oman’s port and industrial zone in Ad Duqm (Duqm SEZA) hosted Oman Wanfang LLC for a signing ceremony on the 19th April for the Chinese company to develop 1,172 hectares of land adjacent to Ad Duqm’s port.

China-Arab Wanfang Sign
China-Arab Wanfang Sign

Wanfang is a consortium of six private Chinese companies backed by the regional government of Ningxia region.  The initial agreement for 50 years was signed in May 2016.

Ali Shah of Wanfang and Yahya Al Jabri of Ad Duqm Economic Zone sign the initial agreement in 2016
Ali Shah of Wanfang and Yahya Al Jabri of Ad Duqm Economic Zone sign the initial agreement in 2016

The importance of the project to Oman is clear by the attendance of H.H. Sayyid Taimur Al Said

Sayyid Taimur bin Asad bin Tariq al-Said
Sayyid Taimur bin Asad bin Tariq al-Said

whose profile within Oman is rapidly increasing after his father was appointed Deputy Prime Minister for international cooperation and the Sultan’s special representative.
The project is divided into 3 sections. The largest of 870 hectares will be allocated to other (Chinese) investors and companies under the supervision of Oman Wanfang who will also be responsible for the area’s infrastructure.

Ali Shah right general manager of China-Arab Wanfang with a sub tenant
Ali Shah right general manager of China-Arab Wanfang with a sub tenant

The government and Wanfang agreed on the minimum development requirements undertaken by Oman Wanfang and implementation phases, which will include development of infrastructure and the establishment of a number of end-user projects.

The Initial Chinese Survey Team Ad Duqm
The initial Chinese survey team at Ad Duqm

Subsidiaries of the Power Construction Corporation of China, will invest $400 million to build a city sized 300MW power plant for tenants operating in the China-Oman Industrial Park. The secondary investors may produce assembly plants, vehicle plants including production of Military Humvee-type vehicles from Wuhan Xiao Long Auto-Tech C, halal foods, logistics, and e-commerce units, solar-based equipment from Ningxia Zhongke Jiaye New Energy, car batteries, oil and gas tools, bicycle assembly units, apparel production facilities.

Xiaolong Vehicle
Xiaolong Vehicle

A smaller area of 292 hectares will be developed for an oil refinery with about 230 thousand barrels a day (compared to Oman’s current production of 1 million barrels) and petrochemicals derivatives, aromatics, methanol. Again the responsibility for development and infrastructure will be Oman Wanfang’s.
The balance of the allocated land of 12 hectares will be a tourism project that should include a $150 million 5star hotel, a $100 million hospital and a school.

Wang Heshan Vice Governor Ningxia 2nd left Sayyid Taimur al-Said 2nd right dig the first hole for the China Oman Ind Park
H.E. Wang Heshan Vice Governor Ningxia 2nd left Sayyid Taimur al-Said 2nd right dig the first hole for the foundation stone of China Oman Ind Park

This is a vast project, considerably larger than the existing port zone and about 50% of the size of Sohar Port. Oman Wanfang will need to develop not less than 30% of the land within 5 years and finish the tourism project within 4 years from the date of signing. Probably the need for a hospital will be the driving requirement for the early finish of the tourism project.

This project which is anticipated to have a $10billion investment may form a central pivot of Chinese ports in the Arabian Sea part of the ‘One Belt, One Road’ / ‘Belt and Road’ initiative. The northern terminus will be Pakistan’s Gwadar (previously an Omani enclave) whose port will also be the terminus of the revived Karakoram Highway route from north-west China into Pakistan. Like Ad Duqm, Iran will be a probable supplier of gas to power projects at Gwadar.

Sayyid Taimur al-Said centre with Wang Heshan Vice Governor Ningxia and HE Yahya Al Jabri
Sayyid Taimur al-Said centre with H.E. Wang Heshan Vice Governor Ningxia and H.E. Yahya Al Jabri

The port at Gwadar is largely operated by a Chinese company. The southern port seems likely to be Bagamoyo in Tanzania which will be a Tanzanian, Chinese and Omani government project. This project which though signed in 2015 has had a stop/start life so far and with an existing naval port being built by China in Djibouti it will have competition for investment.

In addition to the Chinese investment, there is an additional Duqm Refinery, a 50:50 joint venture between the Oman Oil Company and Kuwait Petroleum . This project is seeking 65 percent of its $7 billion capital expenditure to build a refinery from both international and local lending institutions. Iran may also build a vehicle manufacturing plant and Britain may become a tenant through its naval support operations based in Ad Duqm port.

Oman Air over Muscat
Oman Air over Muscat

To support all this activity an additional flight between Ad Duqm and Muscat has started and the airport at Ad Duqm will be expanded to handle half a million passengers a year. This airport expansion is likely to be finished in 2018.

Author: Tony Walsh

Book author including the current Bradt guide to Oman – edition 4

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