Petroleum Development Oman (PDO) signed late January a $1.2b contract with Japanese supplier Sumitomo to supply piping for its drilling operations in the Asian country through Duqm, Muscat Daily reported.

According to Arabian Oil and Gas, the five-year deal further includes a new supply yard in the Duqm Special Economic Zone, which will be a logistics center for materials being delivered to PDO’s drilling locations.

The business activity in Duqm free zone is expected to get a major boost with the signing of the new pipe supply contract.

The agreement will confirm PDO as an anchor tenant at Duqm from mid-2018, with up to two shipments a week, carrying 3,000 tons of pipe, being routed through the port for its oil and gas fields.

Additionally, 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 program on economic diversification.