Cosco Shipping Co, a unit of China’s biggest shipping group, agreed to build and operate a new container terminal in Abu Dhabi, securing a foothold in the Gulf with a $738mn deal that would more than double cargo-handling capacity at Khalifa port.
The company signed an accord with state-run Abu Dhabi Ports Co yesterday to invest in a planned second terminal at Khalifa, boosting the port’s capacity to about 6mn 20-foot containers from 2.5mn currently. The 35-year agreement will boost Abu Dhabi’s role in regional logistics, Abu Dhabi Ports chairman Sultan al-Jaber said at a news conference at Khalifa.
The concession is valued at about $738mn and is Cosco Shipping’s first such deal in the Gulf, the port company’s chief executive officer Mohamed al-Shamsi said in an interview.
“It’s important because Khalifa port will be the hub for Cosco within the region, and this is part of the initiative of the Silk Road,” al-Shamsi said, referring to China’s effort to establish a maritime equivalent of the fabled Asian overland trade route. “We are confident that Cosco will bring big volumes into Khalifa port.”
Cosco Shipping is the world’s fourth-largest container liner with a market share of 7.5% as of September, according to shipping data provider Alphaliner, and it has the world’s largest dry bulk fleet, used to transport commodities. Abu Dhabi, the capital and largest emirate in the UAE, is seeking to expand its trading facilities as part of a strategy to diversify its oil-based economy.
Abu Dhabi holds 6% of global crude reserves.
Khalifa port’s existing terminal will handle 1.65mn containers this year, al-Jaber said. By 2030, the emirate expects the port to move 15mn containers and 55mn metric tonnes of cargo, Ali Majed al-Mansoori, head of the Abu Dhabi Department of Economic Development, said in a speech last October.
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