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Industry update: Africa

The latest news in the African pipeline industry, including planned rehabilitation projects in Egypt and progress on the Horn of Africa Pipeline.

Egypt plans to enhance pipeline infrastructure

In September the Egyptian Minister of Petroleum, Tarek El Molla, announced that the ministry is working on improving operations along the country’s 5,720 km oil and petroleum pipeline network. He also said that Egypt is focusing its petroleum efforts on new refining projects in the Suez Area.

Egypt’s pipeline-improvement projects will cover replacement and renewing efforts to further expand the grid, with the aim of increasing pipeline capacity in order to meet local demands. The Minister revealed the improvement plans during a meeting with the General Assemblies of the Petroleum Pipelines Company, Suez Oil Processing Company, and Nasr Petroleum Company (NPC).

Mohamed Hafez, CEO of Petroleum Pipelines, also took the opportunity to explain his company’s improvement program which includes the rehabilitation of existing pipelines via replacement and renewal projects. He said that the company has also started operations on the Wadi Feiran/Petrobel butane pipeline which will deliver more than 30,000 t of butane to Petrobel’s storage facilities for distribution to regions in Upper Egypt.

Mohamed Ahmed Eliwa, CEO of NCP, was present at the meeting and said that his company’s work in refining crude oil helped in meeting US$769 million in local demand of butane, naphtha, and jet fuel, with an additional US$141 million in naphtha exports.

Reda Abd El Samad, CEO of the Suez Oil Processing Company, took advantage of the meeting to announce that the firm had supplied local demand of petroleum derivatives, fuel, diesel, and butane estimated at US$447 million, in addition to producing propane, naphtha, sulphur and coal during the fiscal year 2015/2016. In addition to this current production the Suez Oil Processing Company plans to invest US$94 million in butane and asphalt production projects.

Progress on the Horn of Africa Pipeline

The proposed 20 inch, 550 km Horn of Africa Pipeline will transport diesel, gasoline, and jet fuel from port access in Djibouti to central Ethiopia. The Ethiopian and Djibouti governments signed a framework agreement for the construction of the US$1.55 billion pipeline in October, 2015. The signing ceremony was attended by Ismail Omar Guelleh, the President of Djibouti; Hailemariam Desalegn, Prime Minister of Ethiopia; and senior government officials from Djibouti and Ethiopia.

Key project stakeholders have spent 2016 finalising investment decisions for the project. Construction of the project is expect to be completed over the coming two years, with the pipeline scheduled to be fully operational by 2018. The completed pipeline will have a capacity of 240,000 bbl/d of fuel.

The project also includes an import facility and 950,000 bbl/d of storage capacity in Damerjog, Djibouti, linked to a storage terminal in Awash, Ethiopia, near Addis Ababa. The Horn of Africa Pipeline project is being spearheaded by a joint venture of Black Rhino Group and Mining, Oil & Gas Services (MOGS), a subsidiary of Royal Bafokeng Holdings, in reaction to the growing strain on Ethiopia’s current fuel-import system, which sees tanker trucks transporting jet fuel, diesel, and gasoline from the Port of Djibouti
into Ethiopia.

Up to 500 trucks per day transport fuel to the load centre in the greater Addis Ababa area, travelling approximately 800 km of narrow two-lane road. The current fuel-transportation system is reaching the upper limits of its capacity, and a purely trucking scheme will not be able to logistically meet Ethiopia’s demand requirements.

Black Rhino Group said that Ethiopia’s demand for refined oil products is growing at a rate upwards of 15 per cent annually.

The company forecasts that, if compared to historically similar countries in a similar development path, Ethiopia’s demand for fuel will continue to increase at approximately 20 per cent annually.

“The Horn of Africa pipeline will increase energy security, aid economic development and reduce harmful emissions,” Black Rhino’s Chief Executive Officer Brian Herlihy said.

The proposed pipeline is also expected to stimulate the economic development, reduce the carbon emission impact of current road-based transportation systems, improve the fuel-import capacities and efficiencies, and provide cheapest option for fuel transportation for both Ethiopia and Djibouti.

This article was featured in the December edition of Pipelines International. To view the magazine on your PC, Mac, tablet, or mobile device, click here.

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