Global energy trading house Trafigura has made the first step towards a planned oil terminal investment at the port of Berbera, Somaliland, the self-governing region in the northeastern corner of Somalia. This week, the firm delivered its first shipment of gasoil to the port, and it intends to build out its capacity at Berbera as a gateway for the Horn of Africa region.
Trafigura wants to upgrade Berbera’s oil terminal in phases to expand its storage capacity, and eventually it will use the site to import of jet fuel and LPG for local and regional use. Its plans also include dredging the berth to allow larger vessels to be received. Somaliland is experiencing growing demand, and the government hopes to see Berbera become a hub for liquid bulk and other cargo.
“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,” said Mohamoud Hassan Saad, Somaliland’s minister of trade. “By working with Trafigura there will be increased transparency, high standards, and increased competitiveness across the supply chain.”
The Port of Berbera has been developing rapidly in recent years. In 2016, terminal operator DP World signed a $440 million, 30-year concession agreement to manage the port, and its plans include significant infrastructure investments. Last month, it announced the completion of a 1,200-foot berth expansion, and it will use the extra space to boost the port’s containerized cargo capacity to 500,000 TEU per year. The project is slated for completion in the first quarter of 2021.
Somaliland has been a de facto independent state since 1991, and the port expansion project is the largest single investment in its three decades of history. Follow-on projects will include an adjacent free zone to attract businesses, along with road improvements to connect Berbera with the Ethiopian border.