North African Petroleum and Gas Strategies for Tangiers and Algeria

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Researched by Industrial Info Resources (Sugar Land, Texas). An international petroleum storage terminal will be constructed at the new Port of Tangiers. The joint venture companies, Horizon Terminals of Dubai (HTL), the Independent Petroleum Group of Kuwait (IPG) and Afriquia of Morocco, has been awarded the contract to build, own and operate and transfer (BOOT) the facility under a 25-year concession.

TMSA (Tanger Mediteranee-Agence) the government authority managing the development of the new $1.6 billion port announced the contract for $67 million phase 1 of the terminal, which will have a storage capacity of 308,000 cubic meters. The storage terminal will be located within the port perimeter and will be operated and managed by HTL under its international trade name ‘Horizon.’

The strategic position of Tangiers on the North African coast at the western entrance to the Strait of Gibraltar at Cap Spartel at the junction of the Mediterranean and Atlantic Ocean will enable the new port to handle traffic for Europe, North and South America and West Africa.

The petroleum storage terminal will help solve the shortage of storage facilities in North Morocco and will contribute to the growth of the region by reducing the costs of supplying gas, oil and gasoline. It will also provide bunker services and serve as a transit market for international petroleum marketing companies. The size of the bunker market in the region of the Strait of Gibraltar, with its dense east-west traffic, was estimated to be 6 million tons in 2005.

IPG Chairman Khalaf Al-Khakaf said that the position of terminal located at the crossing of two major maritime routes and 15 kilometers from the E.U. offered a unique opportunity to further expand petroleum trading activities. ”In the case of IPG, the Tangiers investment opens up new marketing opportunities in West Africa while gaining entry into the bunker market of the Strait of Gibraltar,” he said.

The new port facility is estimated to have the potential to serve 300 million consumers through industrial and commercial free zones and has received positive international feedback. Currently, the port has three dry cargo container terminals and one Ro-Ro ferry terminal.

The Horizon Tangiers Terminal SA joint venture will be incorporated in the Free Zone of Tangiers. HTL, a wholly-owned subsidiary of the Emirates National Oil Company (ENOC), will manage the day-to-day operations of the terminal and has a 34% stake, Afriquia 33.5% and IPG 32.5%.

Eastwards, along the northern Mediterranean coast, Algeria is reinforcing its strategic international supply position as a major supplier of gas to Europe and the U.S. by finalizing contracts for the second undersea pipeline to Spain through the Medgaz pipeline and pushing a pipeline project to supply Nigerian gas.

The pipeline, which is scheduled for completion in 2009, will have the capacity to deliver 8 billion cubic meters of gas per annum to Spain, Portugal and France. The $753 million project will be built by a consortium led by Algeria’s Sonatrach and Spain’s Cepsa that is controlled by Total (NYSE:TOT) (Paris, France). BP (NYSE:BP) (London, UK), Endesa (NYSE:ELE) (Madrid, Spain), Iberdrola (XETRA:IBE) (Madrid, Spain), Total and Gaz de France (XETRA:GZF) ( Paris, France) all have 12% stakes in the project.

Algeria is also keen to see the planned Trans-Sahara pipeline constructed. This will allow Nigeria to pump its abundant gas resources across the desert, through Niger, to supply European markets efficiently through Algeria’s pipeline terminals. Currently, the project is seen as a joint venture between Sonatrach and Nigerian National Petroleum Company (NNPC).

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