The scene of action on the industrial front, Sohar has attracted more than $30 billion in industrial investment, thereby hastening the pace of economic diversification
More than $30 billion has been recently invested in industry, real estate and tourism alone in the Sultanate, according to statistics. Such investments have hastened the pace of development and economic diversification in the country.

Moreover, the two pillars of economic diversification and sustainable development, envisioned in the Vision 2020 programme, are industry and tourism. The Sultanate, therefore, has been adding momentum to the growth of these two sectors, so as to take the country on the fast lane of development.
The scene of action on the industrial front, Sohar, as it has been generating substantial investment has been generating substantial investment. According to Ahmed Bin Abdulnabi Macki, Misnister of Economy and Deputy Chairman of the Financial Affairs and Energy Resources Council, the zone – the single largest industrial investment target located near the UAE border – has already received $12 billion in government investment.

Sohar Industrial Estate covers an area of 334 hectares, of which 130 hectares have been developed and subdivided into 226 plots. Established in November 1992, Sohar – Oman’s garden city – offers tenants easy access to domestic, as well as international markets.

The estate is home to 60 businesses, 18 units under construction and 44 are expected to come onstream in the near future. On the estate’s doorstep is Sohar Port, a large three-phase project which began in 1999.
The construction of a breakwater is already complete, and the dredging and reclamation at the port has been executed.

The port is poised to boast of cargo and container berths and two liquid cargo berths, to be used for oil, as well as a 260-metre quay for the upcoming fertiliser plant.

Moreover, there are plans to erect a fourth for the aluminum smelter project. The strategic location of Sohar and the port have been instrumental in generating considerable international interest in its industrial estate. Production on the estate includes marble, paper recycling; foodstuffs, detergents, leather, furniture, toothpaste, beverages, ice cream, resins, glass, steel bars and engine oil. Some of the major projects like the fertilizer project, the methanol project, Sohar Oil Refinery, the polypropylene project, aluminium, petrochemical and steel projects, the aromatic complex and

the Ethylene Dichloride (EDC) project, have greatly boosted the industrial zone. On April 18, 2007, two mega-projects – the $1.6 billion ohar Refinery and Oman Polypropylene project – were inaugurated. These projects will play a vital role in propelling the country into a major player in the petroleum and petrochemical sector. Moreover, these projects are a significant milestones in the efforts to realize the Vision 2020 goals. On the occasion of the opening of these projects, HE Maqbool Bin Ali Bin Sultan said: “This is just the beginning. More projects, such as an aromatics plant, a steel project, an aluminum smelter, fertilizer and methanol projects, besides those in the service industry sector, are in the pipeline.
The fully-operational Sohar Refineryhas the capacity to process 116,400bpd. The refinery will produce kerosene, LPG, naptha, regular/premium gasoline, propylene, low sulfur gas oil, granulated sulfur and fuel oil. Eighty per cent of the refinery’s products will be exported, while 20 per cent will be locally distributed. The company has set a target of 93pc Omanisation by 2010.

The CEO of Oman Polypropylene, Dr Ahmed Bin Hasim Al Dhahab, said that the project would greatly help achieve the government’s Vision 2020 target. It will also push forward the growth of the local industry. The polypropylene plant is designed to produce 340,000 tonnes of polypropylene per year.

Fertilizer Project

The $650 million Sohar International Urea & Chemical Industries SAOC is a fertiliser company promoted by Sheikh Suhail Bin Salim Bahwan. The project in Sohar will have a capacity of 2,000tpd ammonia and 3,500tpd granular urea. The project is expected to be in commercial production by the last quarter of 2007. The EPC contract has already been awarded to a Japanese consortium, led by Mitsubishi Heavy Industries Ltd. The process technology will be provided by Haldor Topsoe for ammonia, Snamprogetti for urea synthesis and Yara Fertilizer Technology for urea granulation. Credit facilities will be provided by the Japan Bank for International Cooperation (JBIC) and Nippon Export and Investment Insurance (Next)

Aluminium and Petrochemical Projects

Two projects to be set up in Sohar are an aluminium smelter and a petrochemical plant. The total cost of these projects will be approximately $4.37 billion. The feasibility study for the smelter has been completed and the detailed design and business plan are now being finalised.

The project, which is set to have an annual capacity of 48,000 tonnes, will be allocated two trillion cubic feet of gas over a 25 year period. The company will be known as the Sohar Aluminium Smelter Company (SASCO) and 60 per cent will be owned by the founders, a consortium of Omani and foreign investors. The remaining 40 per cent of the equity will be offered for public subscription.

The smelter will have its own power station with an initial capacity of 1200mw, increasing to 1800mw, and a desalination plant producing 12 million gallons a day, which will increase to 30 million gallons a day.
The aluminium project is aimed at producing electrolytic aluminium from imported alumina by utilising the power generated from natural gas. The project will have both power plant and the aluminium smelter. The project smelting capacity will be of 325,000 tonnes per annum in the first phase of development and the capacity will be further increased by another 325,000 tonnes at a later stage. Proposed captive power plant capacity will be 800MW. An additional power generation capacity of 600MW will be created during the second phase.

Oman Oil Company (40 per cent), Abu Dhabi Water and Electricity Authority (40 per cent) and Alcan Inc. (20 per cent) will own the venture. The project will be based on most advanced and highly efficient Pechiney-AP30 technology developed by Alcan Inc., Canada. Commercial production is expected by the end of 2007.

Oman Petrochemical Industries Company (OPIC) is expected to complete its plants in Fahoud and Sohar by the second quarter of 2009, and full-scale commercial operations are expected to begin from that point onwards. OPIC is a joint venture between the Government of the Sultanate of Oman, Oman Oil Company SAOC (OOC) and Dow Europe Holding BV, which was formed in November 2004 to design, build and operate a petrochemical complex in Oman. Located in Fahoud in the central region as well as in the Sohar Industrial Port Area, the complex will comprise feedstock production facilities, a gas extraction plant, a gas cracker, as well as three world-scale polyethylene production units based on state-of-the-art catalyst and process technology. The joint venture will facilitate the development of downstream industries in Oman that will convert polyethylene to end-products in Oman thus enhancing the level of job creation that will result from the complex.

Aromatics Complex
Oman Oil Company in joint investment with Oman Refinery Company is setting up a $956-million aromatics complex in Sohar. The basic engineering contract has been awarded to Axens, France. The aromatics complex (petrochemicals) will produce 800,000tpa para-xylene and 210,000tpa benzene, which are used as raw materials to produce polystyrene, nylon, detergents and other chemicals.

Steel Project
Shadeed Iron and Steel LLC, a company formed by Al Ghaith Holding, a UAE based business group, will set up an integrated steel plant in Sohar in technical collaboration with Midrex Technologies, USA, and VAI Fuchs of Germany. The first phase of the project will produce 720,000 tonnes of hot bricketted (HDRI/HBI) iron, including 500,000 tonnes of steel billets per year.
In the second phase, the capacity will touch one million metric tons per year. The project cost for the first phase is estimated at RO 350 million. The major markets will be Oman, the UAE, India and China. The ore will come from the world's leading producers of Australia, Brazil, Russia and Sweden.
The steel project will expand its production capacity to four million metric tonnes per year at the end of the third phase (2009-2010). Once the project completes all three phases, the total number of direct manpower required will be 585. It is also expected to provide indirect job opportunities for more than 700 people.

Methanol
German private investments in Sohar are due to reach $700 million. In April 2005, construction started on a $400-million methanol plant in the industrial area of Sohar. Oman Methanol Company, the joint-venture company, is supported by three solid partners: Methanol Holdings (Trinidad) Limited (the owner of the plants), the Omzest Group, an Omani company, and MAN Ferrostaal. The methanol plant will produce one million tonnes of methanol annually by 2007. This entire German-Omani joint venture will be an investment of about $850 million.

The first phase of $500 million is partly financed by the German government-owned KfW Bank (Kreditanstalt fuer Wiederaufbau). In total, the investment from the private German side will be over $400 million.

Another German-Omani-Norwegian joint venture in Sohar is Oiltanking Odfjell Terminals & Co. LLC, which was established in July 2005. Through its subsidiary Oiltanking, German Marquard & Bahls AG from Hamburg - together with Odfjell ASA from Bergen/Norway, Oman Oil Company SAOC and Seven Seas Co. LLC/ Muscat - Oiltanking Odfjell Terminals & Co. LLC is due handle all the storage as well as loading and unloading of liquids to and from ships in Sohar port.

Through these two German ventures in Sohar, Oman at present attracts the biggest German private investment on the whole Arabian Peninsula. There are possibilities of the establishment of further downstream industries in Sohar will attract additional local and international investments in the future.