Global energy trading
house Trafigura has made the first step towards a planned oil terminal investment
at the port of Berbera, Somaliland, the self-governing region in the
northeastern corner of Somalia. This week, the firm delivered its first
shipment of gasoil to the port, and it intends to build out its capacity at
Berbera as a gateway for the Horn of Africa region.
Trafigura wants to
upgrade Berbera's oil terminal in phases to expand its storage capacity, and
eventually it will use the site to import of jet fuel and LPG for local and
regional use. Its plans also include dredging the berth to allow larger vessels
to be received. Somaliland is experiencing growing demand, and the government
hopes to see Berbera become a hub for liquid bulk and other cargo.
“We’re delighted to be
working with a leading independent, international company like Trafigura to
improve the quality and reliability of refined petroleum product supply into
the country,” said Mohamoud Hassan Saad, Somaliland's minister of trade. “By
working with Trafigura there will be increased transparency, high standards,
and increased competitiveness across the supply chain.”
The Port of Berbera has
been developing rapidly in recent years. In 2016, terminal operator DP World
signed a $440 million, 30-year concession agreement to manage the port, and its
plans include significant infrastructure investments. Last month, it announced
the completion of a 1,200-foot berth expansion, and it will use the extra space
to boost the port's containerized cargo capacity to 500,000 TEU per year. The
project is slated for completion in the first quarter of 2021.
Somaliland has been a de
facto independent state since 1991, and the port expansion project is the
largest single investment in its three decades of history. Follow-on projects
will include an adjacent free zone to attract businesses, along with road
improvements to connect Berbera with the Ethiopian border.