Wednesday, January 18, 2023
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BusinessEthiopia considers building oil terminal in Djibouti

Ethiopia considers building oil terminal in Djibouti

Capacity limitations at the Djibouti oil terminal has prompted the Ethiopian government to start planning to build an oil terminal at the port of Djibouti, The Reporter has learnt.

The Ethiopian Petroleum Supply Enterprise (EPSE) receives the petroleum products from oil tanker vessels and stores it in the oil terminal until it is loaded on fuel tanker trucks that transport the products to main land Ethiopia.

CEO of the Ethiopian Petroleum Supply Enterprise, Tadesse Hailemariam, told The Reporter that the Djibouti Horizon Fuel Terminal (DHT) has capacity limitation to handle Ethiopia’s increasing fuel imports. “We are having a tough time at the Horizon Terminal due to capacity limitations. The terminal is now unable to accommodate the increasing petroleum imports. We are suffering,” he told The Reporter.  

The Djibouti Horizon Fuel terminal tank farm has a total of 31 tanks with a storage capacity of 300,000cu.m of petroleum products. The terminal has various tanks for gasoline (benzene), gas oil (diesel), kerosene and jet fuel. DHT Company has allocated half of the tank farm more than 150,000 cu.m of petroleum storage capacity for Ethiopia. EPSE uses the facility to store 72,000cu.m of diesel, 70,000cu.m jet fuel, gasoline 10,000cu.m and 10,000cum fuel oil. “But this is now not enough for us to handle the growing petroleum imports,” Tadesse said.

The military strength including the US, France and China have military bases that consumes large amount of fuel for their aircraft and naval ships. The military bases use DHT to satisfy their petroleum demands.   

According to Tadesse, the Ethiopian government is now planning to jointly develop a new oil terminal with the government of Djibouti. The planned tank farm will have the capacity to store 30,000cu.m of petroleum products and a JT pipe that receives oil from tanker vessels. Preliminary study undertaken by ESPE indicates that the planned oil terminal could cost to the tune of USD 220 million.

Ethiopian fuel import has been growing at a rate of 10 percent every year and reached three million metric tons valued at three billion dollars. The country’s daily average consumption is diesel 80,000 cu. M (8 million liter), benzene (gasoline) 1,600cu.m (1.6 million liter), jet fuel 2,500cu.m (2.5 million liter). EPSE pays two million dollars for Horizon Terminal for the storage facility.  

DHT is owned by a Dubai-based company, Horizon Terminals Limited (HTL) and a Djiboutian businessman, Abdourahman Boreh. HTL was incorporated in 2003 as a limited liability company in Bahamas by Emirates National Oil Co. (ENOC), a company owned by the government of Dubai.  Wholly owned by ENOC, HTL’s authorized share capital is 200 million USD.

Sources told The Reporter that DHT was unable to expand the oil terminal due to a feud between Bore and the government of Djibouti. Sources said the Ethiopian government should reach an agreement with the government of Djibouti to secure land to jointly develop the planned oil terminal.

EPSE is in the process to build a new oil tank farm in Dukem town, Oromia Regional State, at a cost of USD 150 million.

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