Rising tides of port investment wash over the Middle East

Ahead of September’s Port Development MENA Conference in Dubai, Tarannum Syeeda, Senior Marketing Manager, Olga Gavrilova, Conference Director, and the rest of the team at leading event coordinator IQPC compiled a detailed report on the current progress of port expansion projects throughout the MENA region. 

 “The Middle East occupies a central position in world trading routes, offering the potential to exploit transhipment for container shipping in particular,” said Thomas Cullen, Senior Analyst, Transport Intelligence. 

“Container terminals in Oman, Egypt, North Africa and the Gulf have sprung-up often experiencing considerable success. 

As manufacturers increasingly develop their distribution strategies to include secondary markets in the emerging regions, the Middle East will continue to enhance its position as a major and reliable transport hub.” 

As the majority of Middle Eastern nations drive towards greater economic diversity and away from hydrocarbon reliance, the busy trading routes and shipping lanes between Europe, Africa and Asia are being harnessed and developed like never before. 

With most Gulf countries sporting a significant coastline along this strategic stretch of water, they are determined to attract a greater market share of this lucrative global industry by making massive investments in the development of container terminals and supporting infrastructure.

With billions of dollars being poured into the ports and shipyards of the Middle East and North Africa, these facilities are quickly becoming key hubs of international trade, shipping and logistics. While the UAE and Saudi Arabia may lead the charge, Oman, Kuwait, Morocco, Bahrain and other MENA countries are rapidly following suit, eager to make their own shipping infrastructure attractive to the rising tide of international shipping volumes.

Key port expansion projects occurring in the Middle East 

UAE:  Jebel Ali Container Terminal 4 

Port Operator: DP World 

Current investment estimate: $1.6 billion 

Additional capacity gained: 3.1 million TEU by 2018 

Key solutions required:  
Construction of 11km quay; placement of 110 cranes, including semi-automated cranes and 35 automated rail mounted gantry cranes (ARMGs).

Project overview: 
Jebel Ali port is one of the largest and fastest growing container shipping facilities in the Middle East and its operator, DP World, is constructing Terminal 4 in response to rapidly increasing demand for larger vessels to dock at the Dubai-based complex. Despite fears of a softening container shipping market putting the expansion on hold last year, work is expected to resume on the project thanks to the stabilisation of shipping volumes at Jebel Ali. Once completed, T4 will bring Jebel Ali’s total capacity to 22.1 million TEU.

Oman: Duqm Port Commercial Terminal and Operational Zone 

Port Operator: Port of Duqm Co (PDC) 

Current investment estimate: $353 million 

Additional capacity gained: 3.5 million TEU 

Key solutions required: 
Construction of terminal building and operational zone; road and paving works, including the construction of 3km of a two-lane dual carriageway internal road; construction of potable water network; quay works for 2.2km commercial berth; a 2.2km container berth; 1km government berth; assorted project management and construction supervision works.

Project overview: 
The Duqm port and operational zone project aims to achieve improved transport efficiency, strengthened logistics, facilitated mineral exports, and reduced supply chain delivery times and costs for the growing number of industries present in the new Duqm Special Economic Zone. Over the course of three-and-a-half years, starting January 2017, the main container port terminal and a wide range of supporting infrastructure will be constructed and made operational to give Duqm a 3.5 million TEU processing capacity.

Oman: Container Terminal D of the Sohar Port expansion 

Port Operator: Oman International Container Terminal (OICT) 

Current investment estimate: TBA ($25 billion invested in Sohar port and freezone to date) 

Additional capacity gained: 5 million TEU

Key solutions required: Container terminal infrastructure; post-Panamax cranes; ARMGs; terminal tractors; automated trucking; processing and security systems. 

Project overview:
The deep-sea Sohar Port and adjacent free zone lie at the centre of global trade routes between Europe and Asia. Recent developments in 2016, such as the construction of four new post-Panamax quay cranes and the addition of automated logistics and processing systems, have massively reduced turnaround times while shipping volumes coming to the port rapidly increased. The expansion plans centre around the construction of a new 5 million TEU container terminal that will bring the port’s total annual capacity up to 7 million TEU.

Saudi Arabia: King Salman Shipyard Project at Ras Al Khair 

Operator: Joint venture between Saudi Aramco, Lamprell, National Shipping Company of Saudi Arabia (Bahri), and Hyundai Heavy Industries 

Current investment estimate: $5 billion 

Additional capacity gained: Four operating zones for the construction, repair and berthing of hundreds of ships and rigs annually. 

Key solutions required: VLCC dry docks; ship repair and construction workshops; support facilities and services such as centralised offices and residential units.

Project overview: 
This vast maritime shipyard project will see the establishment of four main operating zones, each dedicated to different aspects of vessel and rig build, maintenance, repair, and overhaul services, in addition to a full suite of design and financial services. This is a major element of Saudi Arabia’s Vision 2030, which aims to relocate previously outsourced manufacturing and employment opportunities in the maritime industry. Operations are expected to commence in 2019, with the shipyard reaching full operational capacity by 2022. 

Tangier-Med 2 

Port Operator: APM Terminals 

Current investment estimate: $864 million 

Additional capacity gained: Up to 9 million TEU 

Key solutions required: 
Range of automation technologies including shuttle carriers and automated gantry cranes; 2km quay wall construction and site reclamation. 

Project overview: 
Tangier-Med opened in 2007 and quickly became one of the busiest ports in the Mediterranean, now second only to Port Said in Egypt. The Tanger-Med 2 port complex aims to put the port into the Mediterranean’s number one spot, making the most of its strategic location where the Med and the Atlantic Ocean meet. Operator APM will install the latest port technology pioneered at the APM Terminals Maasvlakte II Rotterdam terminal, which opened in 2015.

Building smarter as well as bigger 

As these key expansion and investment projects aptly demonstrate, port operators in the MENA region are not only looking to create larger port facilities capable of accommodating larger vessels in greater numbers, they are also determined to raise annual capacity levels by improving the efficiency of their operations. 

Through the use of automation technologies and smarter logistical solutions, modern port facilities are capable of massively reducing turnaround time and dwell rates, allowing for greater throughput, customer satisfaction and, ultimately, a more profitable operational setup. 

Building capacity and improving efficiency must go hand-in-hand for the operators of the modern MENA ports, and this approach should be the primary concern of all vendors and solutions providers looking to partner with them.

The Port Development MENA Conference 

This report was produced by IQPC Middle East in association with the Port Development MENA Conference taking place from September 26th – 28th 2017 at Dusit Thani, Dubai, UAE. 

Industry professionals and high-level stakeholders will be discussing the biggest challenges and debating best-practice methodologies for securing, constructing and operating port infrastructure in the MENA region. 

Confirmed attendees include Dubai Maritime City Authority, King Abdullah Economic City, General Authority for Suez Canal Economic Zone, Port of Duqm, Port of Salalah, SOHAR Port, Aqaba Development Corporation, Kuwait Port Authority, Port of Rotterdam Authority, Hamburg Port Authority, TASNEEF, AECOM, ZADCO and more.   

Visit: www.portdevelopmentmena.iqpc.ae for more information