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Thu 20 Apr 2017 08:29 AM

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Chinese investors launch $10bn Oman industrial project

First stage of the project will include a power plant, a drilling equipment factory and hotels

Chinese investors launch $10bn Oman industrial project
A picture taken with a fish-eye lens shows Chinese investors listening to an explanation as they check the model of the dry dock which is to be built following an economic agreement, on May 24, 2016 in the Omani port city of Duqm. Chinese investors signed a deal with Omans government to establish an industrial city, including an oil refinery, in the port town of Duqm, both sides said in a joint statement. The agreement signed during the ceremony in Muscat would open way for investments worth $10.7 billion by 2022 to finance industrial projects in Duqm, on the Arabian Sea, which the Omani government is developing in a bid to diversify revenues beyond oil. (Photo: MOHAMMED MAHJOUB/AFP/Getty Images)

Chinese investors in Oman on Wednesday laid the first stone of an industrial zone in the sultanate's southern port town of Duqm under a $10.7-billion (10-billion-euro) development plan.

Chinese investors signed a deal last year to finance a series of industrial projects on the nearly 12 square-kilometre (5 -square-mile) site on the Indian ocean, 550 kilometres (340 miles) south of the capital Muscat.

The first stage of the project is worth $3.2 billion (three billion euros) according to the project's sponsors.

It will include a power plant, a drilling equipment factory and hotels.

Oman in 2008 announced plans to build a port and shipyard in Duqm to handle supersized crude carriers and compete with Dubai's Jebel Ali free zone.

Omani Yahya bin Said bin Abdullah Al-Jabri, Minister of the Special Economic Zone Authority at A'Duqum (R) and Chinese Ali Shah, Chairperson of Oman Wanfang L.L.C sign an economical agreement in May last year

Oman Oil Company and Kuwait Petroleum International last week signed an agreement to build a refinery there worth around $7 billion, with a capacity of 230,000 barrels per day when it is completed in 2019.

In 2015, Chinese investments in Oman amounted to some $2 billion (1.8 billion euros) and trade between China and the sultanate reached $17.2 billion (16 billion euros) according to official statistics.

The sultanate derives 79 percent of its revenues from oil, of which it produces only about one million barrels per day.

Like other Gulf states, it has been hit hard by a cash crunch due to a sharp drop in oil prices since June 2014.

Most of them have introduced austerity measures and set out plans to diversify their economies.

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