The Arab Petroleum Pipelines Co. (Sumed) will establish five new storage tankers at Sidi Kreir, the loading terminal at the northern end of the Sumed pipeline, increasing its storage capacity to 20 million barrels of oil per day.
The move is set to transform the area into a hub for international petroleum and crude oil exchange, Minister of Petroleum Sameh Fahmy said during his visit to Sumed in the Mediterranean city of Sidi Kreir on Sunday.
“The new expansion will provide Sumed with the largest strategic storage capacity of crude oil in the Mediterranean Sea, including 40 types of crude oil coherent to international standards,” Fahmi told Al-Ahram newspaper.
The 320-km pipeline, which links Ain Sukhna terminal on the Gulf of Suez to the terminal at Sidi Kreir, is a major revenue earner for the Egyptian government. The line competes with the Suez Canal by transporting crude oil from large tankers that cannot pass fully laden through the Suez Canal to Europe and the US.
The Sumed pipeline, established in 1977, is a joint venture between Egypt, Saudi Arabia, Kuwait, the United Arab Emirates and Qatar. The pipeline, which has a capacity of 2.5 million barrels of oil a day, pumped a record 113 million tons last year, up from 111.6 million tons in 2005, the company said in a statement.
Sumed Chairman Mahmoud Nazeem stressed that through coordination with Suez Canal officials, Egypt can secure 98 percent of crude oil exports transported through the Arabian Gulf to Europe and the US.
A source at Sumed told The Daily Star Egypt that a working program is currently being established between Sumed and the Suez Canal to attract crude oil transportation from the Arabian Gulf to the Eastern American Coast with amounts nearing 60 million tons. The company will also add 200 large transportation vessels to its already exiting fleet, which is expected to bring in profits amounting to LE 685 million.
Earlier this year, Sumed announced plans to raise its storage capacity by 2.1 million barrels to 6.3 million barrels by the end of 2007 in an attempt to corner the commercial oil storage market in the Mediterranean.
Sumed has positioned itself amongst the pioneers in the oil transportation industry, bringing in LE 1.2 billion in profits in the year 2006.
(Daily Star Egypt)