MIDDLE-EAST LOWER GULF SURVEY
FROM DOHA TO SOHAR The Lower Gulf is home to a high number of different sized container ports. AJ Keyes outlines the make-up of the region and considers recent volume and shipping line trends shaping port strategies “The Lower Gulf region is awash with container ports, of various sizes and types. It ranges from large established transshipment hubs like Jebel Ali, through to rapidly emerging hubs such as Port Khalifa. There is also significant gateway activity too in these areas, but regional dynamics are definitely changing, with the emergence of facilities in Doha and Sohar. Along with continued growth success of AD Ports at Khalifa, I would say that Jebel Ali and DP World can expect to face a challenging future in its back yard,” explains Craig Anderson, Managing Partner at specialist information provider, Data&. Anderson is certainly correct if the location of container ports and countries of domicile are considered. Figure 1 provides an overview of the region, with Doha to the east and Sohar to the west representing the geographic extremities of this port range. BEING SQUEEZED For locational comparative purposes, Bandar Abbas in Iran is shown, although political issues and economic sanctions mean that this facility is not regarded as a viable alternative to any port in the UAE and trade between Iran and other Middle East countries is challenging. Unsurprisingly, UAE ports account for the largest share of container port traffic in the region, as Figure 2 highlights, and this is a position that has not changed nor is it expected to significantly alter moving forward. For example, in 2021, it is estimated that UAE ports handled 17.7 million TEU out of a total of 22.1 million TEU, or 80.1 per cent.
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UAE ports remain dominant, but the share is being eroded due to activities in Qatar and Oman….market dynamics are changing Yet in 2012, the share attributable to UAE ports was 85.8 per cent of the regional total, which rose to 88.3 per cent in 2015, before a subsequent drop to 80.1 per cent for 2021. With Iran’s container port totals not increasing, this change is due to rising container port activity in Qatar (1.6 million TEU) and Oman (with 0.7 million TEU). “There is a clear trend occurring,” explains Anderson, adding, “UAE ports remain dominant, but the share of Jebel Ali is being eroded due to activities at Khalifa Port and in Qatar and Oman. Changing market dynamics can be seen as shipping lines consider alternatives to Jebel Ali as the ‘mustcall’ port”
investment of US$5 billion in three of the company’s flagship assets (including Jebel Ali port), while sovereign wealth fund and owner of Abu Dhabi Ports, ADQ, floated 24.56 per cent of the company in an IPO listing, nevertheless in both cases the majority ownership stakes will not be changing. Both of these moves confirm a desire to diversify ownership and underline the requirement for fresh capital to fund global expansion plans. Economic diversification is a common challenge across the whole region, with the need to move away from such a high dependence on oil for wealth. The Organisation of the Petroleum Exporting Countries report that oil accounts for 30 per cent of GDP in the UAE, but the Emirates News Agency has confirmed a desire to reduce this figure to 20 per cent. This desire is being driven at the Emirate level in Abu Dhabi and Dubai, with both having confirmed 2030 strategies that are specifically targeting high-end manufacturing (such as supporting aerospace and specialist medical equipment) in order to set aggressive targets. Abu Dhabi, for example, has a desire to grow its non-oil sector by more than 7.5 per cent annually in the near future. Page 29 outlines the development of ports, terminals and initiatives in the Lower Gulf region and consider what the future holds for the major operators and their facilities moving forward.
8 Figure 1: Location of container ports in Lower Gulf Region. The Lower Gulf region stretches from Doha to Sohar, with a Jebel Ali and Port Khalifa the dominant ports in the UAE
8 Figure 2: Container Volumes by Country, 20122021 in Million TEU
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Source: Dataand.com
STATE CONTROL BUT ECONOMIC DIVERSIFICATION DESIRED One common theme amongst the ports in the Lower Gulf region is that almost all operators retain very close links to the state but there appears to be a growing willingness to seek investors for minority stakes. DP World recently reached a deal with global investment group, CDPQ, which involved
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