Wednesday, June 19, 2024
BusinessPetroleum enterprise seeks fund for new fuel depot

Petroleum enterprise seeks fund for new fuel depot

The Ethiopian Petroleum Supply Enterprise (EPSE) is looking for funds for the construction of a new national fuel depot.

With the ever increasing fuel consumption of the country, the existing depots could not meet the demand for fuel storage facility. The country has 13 fuel depots with a total storage capacity of 420,000 cu.m of fuel. The largest depot in Awash town can store 130,000 cu.m of fuel.   

To meet the growing demand, the enterprise has decided to build a new modern national depot in Dukem town, 35 km south east of the capital. EPSE has secured 10 hectares of land from the Oromia Regional State for the construction of the state-of-the-art fuel depot facility.

An Australian firm, SMEC International PTY Ltd, have undertaken the engineering design work.  According to the EPSE, the planned depot farm will have at least 12 oil tanks each having 25,000 cu.m of petroleum products. The oil terminal, which will be the biggest in Ethiopia, will have a total storage capacity of 300,000 cu.m (300 million liters) of petroleum products including gasoline, diesel, kerosene and jet fuel. There are 13 oil depots in the country which in aggregate can store 420,000 cu.m (420,000 million liters) of petroleum products. EPSE did not build a jet fuel depot so far due to the sensitive nature of the product. For the first time the country will have an aviation fuel depot with a storage capacity of 50,000 cu.m.  

The total cost of the project is estimated at USD 140 million. Tadesse Hailemariam, CEO of EPSE, told The Reporter that the enterprise is looking for finance from the Ethiopian government as well as foreign investors. “We are looking at different financing options. We anticipate to forge public private partnership (PPP),” Tadesse told The Reporter. Officials of the Ministry of Finance and EPSE held discussions with potential investors in the Middle East. Kuwait Petroleum Corporation (KPC), the Kuwaiti state oil firm, has shown an interest in partnering with EPSE in building the new oil depot. According to Tadesse, executives of KPC have expressed interest in investing in the project. “They were supposed to come to Ethiopia to visit the construction site and hold discussions with us but the visit has been postponed due to the COVID-19 outbreak,” Tadesse said. “Now the government has given due attention to the project and looking at financing options. Had it not been for the COVID-19 crisis the project would have progressed very well by now,” he added.      

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The new depot will be fully automated and the depot will be linked to the new Ethio-Djibouti railway line. The new oil depot site is only 300 m away from the railway line. The new depot will have a modern and efficient unloading and loading facility and a state-of-the-art firefighting system.  The detail engineering design work has been completed. The project will take three and half years. When the project is completed the country’s total oil storage capacity will increase to 720,000 cu.m. The existing depots have the capacity to store 420,000 cu.m of petroleum products which can cover the country’s fuel demand for 40 days. The new depot terminal will boost the total storage capacity to 720,000 cu.m which will cover the country’s demand for 90 days. “The new depot will be modern and environmentally friendly,” Tadesse said. According to him, other foreign investors have also expressed interest to venture into the project.

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