Octal Petrochemicals and Port of Salalah sign cooperation agreement

Signed today at the Port of Salalah's Muscat office, the contract oversees the ongoing development of Salalah's first liquid chemicals terminal, which will support Octal's production capacity expansion and further raise the profile of the port as a regional hub for cargo.

Under the agreement, Octal will have a dedicated berth to receive tanker shipments and build specialized facilities to pipe liquid chemicals underground to its manufacturing plant in the Salalah Free Zone. The chemicals will be transported via a $50m purpose-built terminal or 'tank farm' within Port of Salalah.

The agreement also covers the leasing of land on which the terminal is being built. Two tanks for receiving mono-ethylene glycol (MEG), each with a capacity of 5,000 cubic metres, have already been completed.

A third tank for MEG, a key ingredient in the manufacture of PET (polyethylene terephthalate), will be delivered by the middle of next year. By 2011, the terminal will comprise of nine tanks, three for MEG and the remainder for other liquid chemicals.

Signing the agreement on behalf of the Port of Salalah, CEO Martijn van de Linde said, "I am delighted to sign this agreement with Octal Petrochemicals. The success of Port of Salalah and Octal's growth as a global export leader go hand in hand. We believe in cooperation and adapting our services to serve the specific needs of growing industries like Octal."

"Due to the commitment of customers like Octal, the General Cargo Terminal at Port of Salalah has seen double digit growth for eight consecutive years. We have invested in new deepwater berths and facilities that will cater to the multiple cargo types handled at the port well into the future. I look forward to continued support and cooperation with Octal and wish them great success," de Linde added.

Representing Octal Petrochemicals at the signing, Managing Director Nicholas Barakat said, "Octal is making a significant investment in order to manage costs and drive business. The liquid chemicals tank farm is the first of its type in the region, and by piping chemicals underground to our plant in the Salalah Free Zone, the delivery process involves no disruption to the operation of the port and maximizes public safety."

Barakat added, "The level of support from the Port of Salalah has been exceptional, and thanks to its management team we are hitting our targets for expanding production capacity and becoming the largest PET manufacturer in the Middle East."

Barakat added that the piping and supporting infrastructure for the tank farm was already in place and operational. The new facility is protected by advanced fire fighting equipment and meets all the health, safety, security and environmental (HSSE) regulations of the Royal Oman Police.

Oman-based Octal announced the launch of its second plant, a 300,000 metric ton integrated PET resin and sheet facility, in January. Octal expects per annum sales to reach $400m by the end of 2009, and despite the global economic downturn remains in expansion mode with plans to hire 100 extra staff before the end of the year.