• Home
• /
• Business

Egypt to set up oil storage firm next year

CAIRO - Egypt will establish a company to build a million-tonne storage facility for Arab Gulf crude oil in the country’s Mediterranean city of Sidi Kerir in 2008, a senior Oil Ministry official said on Tuesday.

The storage and loading firm is a joint venture between the Egyptian Oil Ministry and Sumed, which is owned by the Arab Petroleum Pipelines Co., the ministry source said.

“The firm will build a few commercial storage tanks, which will make Sidi Kerir the main storage hub in the Mediterranean,” the official told Reuters.

He did not give the project’s total investment, but said the storage capacity could be raised if oil demand increased.

Small-capacity tanks will offload the Gulf crude in Sidi Kerir, where the crude oil is to be stored until it is re-exported by more economic large-capacity tankers.

A source at Egypt-based Sumed said that the firm will store crude for companies on both term and spot-basis.

The Sumed pipeline, established in 1977, is a joint venture between Egypt, Saudi Arabia, Kuwait, the United Arab Emirates and Qatar.

The 320-km pipeline, which links Ain Sukhna terminal on the Gulf of Suez to the terminal at Sidi Kerir, is a major revenue earner for the Egyptian government and competes with Suez Canal by transporting crude oil from large tankers that can’t pass fully laden through the Suez Canal.

The pipeline, which has a capacity of 2.5 million barrels of oil a day, pumped a record 113 million tonnes last year, up from 111.6 million tonnes in 2005, the company said in a statement.

Earlier this year, Sumed said it planned to raise its storage capacity by 2.1 million barrels to 6.3 million barrels by the end of 2007 to corner the commercial oil storage market in the Mediterranean.

The company said it will build three storage tanks at Sidi Kerir, the loading terminal at the northern end of the Sumed pipeline.

The storage facilities are configured to include among others undertake crude swapping, delivery and to b able to handle a variety of crude grades.