Petroleum Development Oman (PDO) has recently signed a USD 1.2B contract to supply piping for its drilling operations through Duqm. The five-year deal with Japanese supplier Sumitomo further includes a new supply yard in the Duqm Special Economic Zone which will be a logistics centre for materials being delivered to PDO’s drilling locations.
The agreement will confirm PDO as an anchor tenant at Duqm from mid 2018, with up to two shipments a week (carrying 3,000 metric tonnes of pipe) being routed through the port for its oil and gas fields. The logistics hub will provide integrated supply chain management services – such as storage, planning and delivery – and 30 trucks a day will be needed to transfer the pipes from the new supply yard to PDO’s drilling locations.
The move will significantly build capability at Duqm to become the primary logistics hub for the Sultanate’s oil and gas sector and complements the Tanfeedh programme on economic diversification. The new agreement is a renewal of an existing contract to supply PDO oil tubular goods, casing and tubing pipes used for drilling, and consolidates the Company’s long-standing business relationship with Sumitomo.
Under the terms of the deal, Sumitomo has committed to further support ICV initiatives, on top of its large investment in Duqm. The deal builds on the Government’s strategic aim to make Duqm the oil and gas port for Oman and will further attract other companies’ services to the hub.