Global commodities trader Trafigura is to invest in upgrading the Berbera Oil Terminal in Somaliland to become a regional supply hub serving the Republic of Somaliland and integrate oil logistics across the Horn of Africa.
Trafigura signed what it calls a ‘milestone storage agreement’ earlier in 2020 with the Government of Somaliland’s Ministry of Trade, Industry, and Tourism, and has now delivered its first shipment of low Sulphur gasoil to the Port of Berbera. The company says this is the first step in its comment to invest in the Berbera terminal.
Trafigura will improve and expand storage capacity at Berbera Oil Terminal in phases, and will also increase the draught to accommodate larger vessels, allowing more economical imports for refined products and access to re-export markets. The company will eventually import jet fuel and LPG to meet growing local demand. It has pledged to ensure that international health and safety standards are met.
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‘The agreement gives Trafigura access to the existing terminal for storage of refined petroleum products in order to supply the local market in a strategically important region,’ says James Josling, head of Africa energy trading for Trafigura. ‘We are working alongside the government to reduce Sulphur limits in the local fuel specifications, to give the opportunity for Somaliland to align product specifications with regional market standards such as Ethiopia and Djibouti, which will promote cross-border trade while improving air quality in line with Trafigura’s wider ESG [Environmental, Social, and Corporate Governance] agenda and commitment to Africa.’
Mohamoud Hassan Saad, Somaliland minister of trade industry and tourism, adds: ‘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. By working with Trafigura there will be increased transparency, high standards, and increased competitiveness across the supply chain.’