Egypt plans to construct a company to build a million-tone storage facility for Gulf crude oil in the country’s Mediterranean city of Sidi Kerir in 2008, a senior Oil Ministry official said.
The storage and loading firm is a joint venture between the Egyptian Ministry of Petroleum and Sumed, which is owned by the Arab Petroleum Pipelines Co, the 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 oil will be stored until it is re-exported by more economic large-capacity tankers.
A source at Egypt-based Sumed said the firm will store crude for firms on both term and spot-basis.
The Sumed pipeline, established in 1977, is a joint venture between Egypt, Saudi Arabia, Kuwait, the UAE and Qatar.
The 320-kilometre pipe-line is a major revenue earner for the Egyptian government and competes with Suez Canal.