Petroleum Development Oman (PDO) signed on Thursday a 1.2 $ billion 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.