Citadel Capital’s subsidiary Mashreq Petroleum announced today the signing of a concession agreement entailing a period of 25 years with the Port Said Port Authority in addition to another conditional 5 years for achieving 90% of the agreed upon goals. This project will provide fuel bunkering services for vessels transiting the Suez Canal, to capitalize on the unique location of the world’s busiest maritime route, with more than 20,000vessels transiting annually. Total traffic through the Canal represents 10% of global maritime transport and approximately 22% of containers trade worldwide.
Dr. Tamer Abu Bakr; Chairman and Managing Director of Mashreq Petroleum, stated that “The project will provide storage services products, liquid bulk by pooling shipments and fragmentation (making and breaking bulk), in order to meet the needs of the markets in Southern Asia, Middle East and Mediterranean coast markets”.
He also added: “It is planned that the investment cost of the project will be about 3 billion Egyptian Pounds to create a storage capacity of up to about 800 thousand tons of petroleum products (diesel – solar – Nafta – Jet), in addition to 3 berths accommodating tankers, that the company created within the project to receive tankers up 120 thousand DWT, in addition to 4 berths for bunkering barges inside and outside the port, noting that the project will be completed throughout two phases.”
Mashreq Petroleum growth plans are based on the increase in activities of the maritime transport of petroleum products through the Suez Canal as well as the continued lack of diesel fuel and fuel oil in the Middle East and the Mediterranean, given that the volume of petroleum products passing through the Suez Canal has increased annually by 17% almost during the past eight years to reach Nearly 110 million tons in 2012.
This contract falls under the BOT system for 25 years, growing at a rate of one for every five years where the project achieves at least 90% of the targeted plan so as not to increase the overall duration of the concession for 30 years unlike a grace period of three years to build the project
The existence of storage project of petroleum products in Port Said has its multiple dimensions and its strategy of strengthening the Suez Canal navigational global trade of goods and oil under the geographic, political and competition variables expected from the trade routes between the East and the West, and also it is a magnet for international companies and shipping giant lines to work at the port and contribute in the provision of strategic stocks of petroleum products when the country is in need for imports, through linking Mashreq projects with the current National Grid for pipelines existing within the country through the pipeline that crosses the Suez Canal (17 km just south of the project site), besides the presence of these projects will support the development of projects established in East Port Said area, such as power plant and factories.
Mashreq Petroleum has fulfilled all regulatory and governmental approvals necessary for the implementation of the project; including the adoption of environmental studies. The company also ended its storage station designs.
Worth to mention that Mashreq Company was founded in 2005 for the purpose of establishing and operating the first specialized regional station in the activities of storage and trading of petroleum products and other logistical support services.
