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A one way street

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Fuel distribution and storage provider Oryx Energies jointly owns (with the Tanzanian government) one of the largest bulk import and storage sites in sub-Saharan Africa. TIPER is a former refinery located in the strategic port of Dar es Salaam. In June 2015, Oryx Energies finished renovating two additional crude tanks at the site, bringing the facility’s capacity to 250,000 m3 in 32 tanks.

These tanks are used for strategic storage as well as being available to third party customers. ‘The terminal is in an excellent location for transporting product to Africa’s landlocked countries, such as Rwanda, Zambia, the DRC or even Uganda,’ Thierry Genthialon, MD for asset management and business development at Oryx Energies, explains.?The main purpose of storage in Africa is not quite the same as in northern Europe or on the American coasts where the ports have two-way traffic. Most of the ports in Africa have one-way traffic, handling imported product and product for further distribution on the coast or inland.

Genthialon adds that these tanks are not yet rented out. ‘There was a slight dip in demand for storage last year and at the beginning of this year,’ he explains. ‘Companies were trying to decrease their stock due to the uncertainty over oil prices. There has now been some recovery in the prices, but people are still in waiting mode – we don’t think we’ve reached a contango pattern yet.’

The TIPER facility is one of the few storage sites in Tanzania with space for further expansions. ‘We are planning to build an extra 80,000m3 in the next 12-16 months,’

Genthialon says. ‘The land levelling has just started.’ Despite the company’s growth plans, Genthialon admits it is not always easy working in Africa. ‘There’s a lot of competition, particularly for marketing depots,’ he explains. ‘The problem is these aren’t always well regulated. We would like to see stricter regulations controlling how tanks are built, the quality of product and compliance with HSSE standards. Since the Energy and Water Utilities Regulatory Authority (EWURA) was introduced in Tanzania, things have already started to improve.

‘Another of the issues we face in Africa is fuel subsidies,’ Genthialon adds. These can lead to product being contaminated with cheaper, subsidised fuels and can also lead to fuel shortages when Governments can’t afford the subsidies anymore.’

Although Oryx Energies already operates an LPG terminal in Dar Es Salaam, it has now opted to build its extension on the fast-developing area of Kigamboni where Tiper is located.
The 6,000m3 sphere will be ready in around 18 months. Choosing the size of tank to build was not an easy decision. ‘LPG tanks are expensive to build,’ Genthialon explains. ‘The LPG market in Africa is growing around 15% a year so we know there will be long term demand for the storage capacity, but if you build too big, you will lose money for the first few years. In Côte d’Ivoire, for example, we completed a second LPG sphere last year, as demand had clearly exceeded the capacity of the one acquired in 2005.

LPG is an excellent choice for Africa, where it is used as a transitional fuel. ‘In the long term it may make sense to build LNG infrastructure, but building all the pipework, regasification plants and storage, etc, is a massive investment – Africa is not ready yet.’

Las Palmas
At the end of last year Oryx Energies started operations at its fuel and gas oil terminal at Las Palmas in the Canary Islands. It is strategically placed on the main commercial route between Europe, West Africa and the Americas.

The facility has 221,000m3 storage capacity for and access to a long, deep water jetty. At the moment it is largely used by Oryx Energies’ trading division but now the terminal is fully operational it is also open to third party requests.

‘We expect an increase in demand for storage capacity due to changes in the refinery sector,’ Genthialon says. ‘The Tenerife refinery, for example, is over 50 years old and many others on the West African coast are struggling and inefficient so may close in the future. Our current utilisation rate is six turnovers a year, but we’re gradually increasing this to 10.’

Oryx Energies has access to a second site in the Canary Islands, but hasn’t made any firm expansion plans yet.

Sierra Leone
Oryx Energies has been present in Sierra Leone since 2003 through Petrol Leone, a joint venture with Leonoil. Petrol Leone manages strategic oil storage facilities in the port of the country’s capital, Freetown. Jointly they have a capacity of 60,000m3.

‘We were in survival mode last year, due to the ebola crisis,’ Genthialon explains. ‘The country’s demand for oil products dropped dramatically. Now things are improving. We have resumed work on the construction of a new jetty at the Kissy terminal and we are expanding our storage capacity.’

Freetown has one of the largest natural ports in Africa. Like with TIPER, Oryx Energies’ facility is the site of an old refinery. ‘Along with our partner we have acquired an additional piece of land including approximately 60,000m3 of storage capacity. As our current facility is fully utilised we are deciding whether to refurbish these tanks or build new ones. The first phase of the project is likely to be 40,000m3 and we’ll probably start work next year.’

Oryx Energies is in an excellent position in the country– there are limited other storage possibilities, the economy in Sierra Leone is expanding rapidly and the location serves as a great route to landlocked countries such as Mali.

Oryx Energies has a total of seven strategic oil terminals in East and West Africa. It continues to look at other opportunities across Africa, but states that deepwater access remains a challenge. ‘On the east coast there are only two or three deepwater ports and on the West ports are often too busy, which results in demurrage costs.’