The state-owned Oman Oil Company (OOC) plans to spend between $300-400 million on the first phase of a major oil storage terminal on the country’s southeastern coast, a senior government official said on Saturday.

Mohammad bin Hamad Al Rumhy, Oman’s minister for oil and gas, said the terminal will be located at Ras Markaz, about 70km from Duqm, where the government is developing a port and industrial zone.

“OOC will continue to develop the project and increase the number of tanks, according to the level of demand in the oil storage market. Our ambition for Ras Markaz is to (make it) one of the largest oil storage hubs worldwide,” Al Rumhy was quoted as saying by Reuters.

He added that the terminal, which is near major shipping routes through the Red Sea to Asia and Africa, would not be financed by the state but through borrowing from banks, including international ones.

In its first phase, the storage facility will have a capacity of between six and 10 million barrels of oil and serve an oil refinery planned for Duqm. Capacity could be expanded to as much as 200 million barrels, Al Rumhy said, without giving timelines for its construction.