Chinese investors signed a deal last year to finance a series of industrial projects on the nearly 12 square-kilometre (5 -square-mile) site on the Indian ocean, 550 kilometres (340 miles) south of the capital Muscat.
The first stage of the project is worth $3.2 billion (three billion euros) according to the project's sponsors.
It will include a power plant, a drilling equipment factory and hotels.
Oman in 2008 announced plans to build a port and shipyard in Duqm to handle supersized crude carriers and compete with Dubai's Jebel Ali free zone.
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Oman Oil Company and Kuwait Petroleum International last week signed an agreement to build a refinery there worth around $7 billion, with a capacity of 230,000 barrels per day when it is completed in 2019.
In 2015, Chinese investments in Oman amounted to some $2 billion (1.8 billion euros) and trade between China and the sultanate reached $17.2 billion (16 billion euros) according to official statistics.
The sultanate derives 79 percent of its revenues from oil, of which it produces only about one million barrels per day.
Like other Gulf states, it has been hit hard by a cash crunch due to a sharp drop in oil prices since June 2014.
Most of them have introduced austerity measures and set out plans to diversify their economies.