May 14, 2013 [CPI Financial] - Citadel Capital has announced that core platform company Mashreq Petroleum has signed a 25-year concession agreement (extendable for a further five years) with the East Port Said Port Authority that will allow it to build the first independent tank terminal in Egypt.
“Coming on the heels of Cabinet-level approval for the project yesterday, the concession agreement between Mashreq and the Port Said Port Authority clears the way for the fast-tracking of this critical project, which stands as a backup to Egypt’s national energy security,” said Mashreq Petroleum Chairman and Managing Director Dr. Tamer Abubakr.
The EGP 3 billion facility will have capacity for up to 800,000 metric tons of product, including liquid bulk (fuel oil, gasoil, naphtha and jet fuel) and bunker fuels, said a press release.
Mashreq will have an annual storage capacity of 10 million metric tons per year and an annual bunkering capacity of two to three million tons with three berths that will accommodate tankers up to 120,000 DWT and four berths for bunkering barges. The project will be completed in several phases.
“The facility will primarily serve liquid bulk market in the Far East, the Middle East and the broader Mediterranean region,” said the press release. “Mashreq will also provide fuel bunkering services for ships transiting the Suez Canal, to capitalise on the unique location of the world’s busiest maritime route, with more than 20,000 vessels transiting annually.
Total traffic through the Canal represents 10 per cent of global maritime transport and approximately 22 per cent of container trade worldwide.
“An estimated 110 million tons of petroleum products passed through the Canal in 2012 (growing at a rate of 19 per cent annually over the previous eight years).
“Mashreq’s growth prospects in the storage market are based on both the fast-rising rate at which petroleum products are transiting the Suez Canal as well as the Middle East and Mediterranean regions’ status as deficit markets for diesel and gasoil.
“The concession is based on a build-operate-transfer (BOT) system for 25 years, extendable by one year for every five years during which the project achieves at least 90 per cent of its operational targets. In total this will result in a 30-year concession in addition to a three-year grace period for construction.
“This strategically vital fuel bunkering and storage facility in Port Said Port supports the Suez Canal as the world’s leading maritime trade route for both commodities and petroleum products.
The project is expected to help attract global companies and large shipping lines to operate at the port and simultaneously help ease the nation’s shortage of refined products by facilitating imports. In cooperation with EGPC, the facility will be linked to the national petroleum pipeline grid at a junction point located 17 kilometers south of the project.
“Mashreq will also help stimulate the growth of additional sectors in East Port Said, including the establishment of new power generation facilities and industrial zones.
“All necessary regulatory and governmental approvals have been obtained, including approved environmental impact assessment reports. Mashreq has also completed the design of its tank farm.
“Energy is one of Citadel Capital’s five core industries of focus alongside transportation, agrifoods, mining and cement. Citadel Capital holds a 25 per cent ownership stake in Mashreq.”
