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Old February 13th, 2020, 02:14 PM   #101
Ras Siyan
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Djibouti is set to construct a floating oil refinery that will position the country as an international bunkering point for ships and a leader in the refined oil market for the East African region.

The project, with a capacity of 6 million metric tons, will be established in the recently opened Damerjog Industrial Park. It will allow Djibouti to transition to lower-sulfur marine fuels, in line with the International Maritime Organization's most recent environmental regulations.

This will help limit the environmental impact of the country's industrial activities and ensure sustainable development not only for Djibouti but also the wider region.

So far, three agreements have been signed between Djibouti Damerjog Industrial Park, Singapore High Quality Energy Pte Ltd, Great Horn Investment Holding and Khor Ambado FZCO to finance and develop the project.

Aboubaker Omar, chairman of Djibouti Ports and Free Zones Authority, a government body that administers and manages the Port of Djibouti and several other facilities in the country, said the international partners are completing the financial and business models for the project, after which construction will begin.

Omar said construction on the floating refinery-costing around $1 billion-is expected to begin in the first quarter of 2020.

He said the major foreign investment is a testament to Djibouti's growing attractiveness as an international investment destination, adding that the floating oil processing plant would "drive forward the country's industrialization and investment in human capital".

"We anticipate the new project will have positive effects that will extend beyond our borders, aiding the increased transportation of refined oil to our neighbors," he said.

The refinery is the first major development in the Damerjog Industrial Park, which is itself viewed as a driver of the country's industrialization.

Established in 2017, the industrial park is on track to host the country's only heavy industrial and petrochemical base.

It will consolidate the country's position as a node on the global trade map, as it will be the only industrial complex in East Africa equipped with a "road-port-air-railway" infrastructure network.

Investors and businesses in the new park will benefit from the advanced logistics and transport advantages, while driving forward the country's vision of becoming a global trade and logistics hub, its backers say.

In addition to hosting the floating refinery, the park will also include a multipurpose port, storage tanks, and dry dock.

Omar said the full range of facilities in the industrial park will be built over the coming years.

"The park is the latest step in the government's development strategy, which aims to add value to Djibouti's strategic location at the crossroads between Africa, Asia and Europe," Omar said.

Djibouti's efforts in infrastructure development-including with a free-trade zone-has attracted praise from other African countries, which have been sending information-gathering delegations.

On Jan 22, a delegation from South Sudan, led by Foreign Minister Awyd Achuil, visited the Damerjog park.

Achuil said the free-trade zone in Djibouti offers a model that other African countries can learn from.

"Africa doesn't have to reinvent the wheel when there are already projects that are promoting economic growth and improvement in the livelihood of the citizens," she said. During the visit, the two countries signed an agreement that will see Djibouti use South Sudan raw oil for the floating refinery project.
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Old Yesterday, 02:43 PM   #102
Ras Siyan
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Ethiopia, whose energy needs are constantly growing, remains dependent on Djibouti's infrastructure policies - and keeps demanding more. But the announced extension of the port of Horizon could be compromised by another project: the Damerjog petrochemical complex.

Djibouti’s business landscape is always rife with contradictory rumours.

But, on the side of the management of the Horizon oil terminal, a subsidiary of the Dubai-based Emirates National Oil Company (Enoc) in Djibouti, “it’s on the record”.

An undersized terminal

The expansion of the port, whose tanks supply the Ethiopian market with at least 95% of its hydrocarbon needs (the rest comes from Sudan), “will begin shortly”.

This will add more than 100,000 cubic metres of capacity to the current 370,000 cubic metres. Enough to meet the insistent pressure from Ethiopia, whose needs have been increasing by 9% each year for the past ten years (4.2 million tonnes in 2018).

Since its construction in 2008, Horizon has been designed for 12 annual rotations. Today, Horizon is overheated with nearly 28 rotations, forcing ships to wait their turn at sea.

“This costs Ethiopia tens of millions of dollars a year in parking fees,” said a source close to the issue.

According to other sources, nothing has been decided yet because several disputes are blocking negotiations with the authorities.

In particular, the amount of the royalty due to the Doraleh Oil Terminal Pier Management Company (SJTP), nationalized in 2018. And that is without the ghostly presence in the capital — talked about everywhere — of the businessman Abdourahmane Boreh, ex-patron of the Port Authority, now an opponent in exile.

“In addition, Djiboutians feel a little that, like DP World at the container port of Doraleh, Horizon Terminals has preferred to invest in its own Gulf terminals rather than in Djibouti,” said a specialist.

Another reason why so many doubts remain is that, just as the Horizon extension hypothesis was resurfacing, the petrochemical complex project at Damerjog, near the Somali border, suddenly accelerated at the end of 2019 after being silent for a year.

A wholly-owned subsidiary of the Djibouti Ports and Free Zones Authority (DPFZA), Damerjog has finally recieved $125m in financing from Afreximbank “which should enable it to start work on the pier, which will take between 18 and 24 months to complete”, confirmed Aboubaker Omar Hadi, president of the DPFZA.

A competition that is going global

“But, if Damerjog goes ahead, the Horizon extension may not happen anymore,” says one professional.

Because Damerjog, which is intended to be a future competitor of Fujairah (United Arab Emirates), will include the 2.5 million tonne refinery by Hong Kong’s Chimbusco, a 600,000 t cement plant, a 2.30 MW power plant, a ship repair area, a metal works, the landing point of a 767 km gas pipeline from Ethiopia, and a 300,000 m3 oil depot.

Targeting not only Ethiopia but also the Kenyan and South African markets, the French-owned Rubis, already present in the country, the Swiss Mercuria, PetroChina, and the Nigerian Sahara Group have all shown interest.

All of which is enough to intensify the competition.

“Between these oil traders and Horizon, not between the latter and Damerjog”, Aboubaker Omar Hadi wanted us to believe.

“While Horizon has repaid all its financing, it may be easier for it to lower its storage taxes than Damerjog, which will have to repay its loan,” predicted one analyst.

It’s going to be an uphill battle.

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