Skip to main content

Opportunity out of crisis

Published by , Editorial Assistant
Tanks and Terminals,

The Middle East and North Africa (MENA) have, for over a century, served as part of the foundations of the international oil and gas sector.

The regions are both blessed with abundant hydrocarbons – and cursed with wars, internal conflict and discord.

MENA is also being buffeted by forces, both economic and political. The rapid rise in unconventionals in the US is threatening their traditional oil and gas markets. The Trump administration’s sanctions against Iran, one of the largest OPEC members, are once again ratcheting up. Regional conflicts threaten the movement of oil to consumers.

Several MENA countries are responding to these challenges by modernising and repositioning their assets and making fundamental changes to the way they do business. Those plans create opportunities for storage and terminals in the region.


The Middle East


Saudi Arabia
Saudi Arabia has 261 billion bbls in proven oil reserves, produces 10.5 million bpd and exports 7.6 million bpd. Over the last several decades, Saudi Arabia has acted as the swing producer in OPEC. The latest strategy, initiated in 2017, reduced OPEC (and Russian) production by 1.8 million bpd in an attempt to stabilise prices in the US$60 – US$70/bbl range. The strategy has been relatively successful in eliminating the surplus glut.

In addition to spending US$4 billion to increase supplies to domestic industrial consumers by building new gas booster compressor stations at the Haradh and Hawiyah gas plants, Saudi Aramco is also making investments abroad. In early 2018, a consortium of Indian refiners entered into a joint venture (JV) to build a mega refinery and petrochemical complex in Maharashtra state, India. The US$44 billion project will include a 1.2 million bpd refinery and petrochemical facilities with a capacity of 18 million tpy. The Indian partner, Ratnagiri Refinery & Petrochemicals (RRPL), is itself a partnership between Indian Oil Corp., Hindustan Petroleum and Bharat Petroleum. A start-up date has not been finalised. Under the terms of the memorandum of understanding (MoU), Saudi Aramco will supply at least 50% of the crude feedstock.

After sanctions on Iran were lifted in 2016, production climbed to 4 million bpd and in 2017, Iran completed construction of a terminal near Kharg Island in the Gulf that added 300 000 bpd export capacity.

However, in May 2018, the Trump administration stepped away from the nuclear deal and again imposed sweeping sanctions. Total subsequently cancelled its agreement to develop phase 2 of the South Pars gas field, citing concerns about the US sanctions (which would prohibit companies dealing with Iran from using US banks). Importing nations have also sought out alternative sources of supply, and Saudi Arabia has promised to increase output to make up for shortfalls.


North Africa


Egypt, which owns the 115 000 bpd Middle East Oil Refinery (Midor), located near Alexandria, is expanding the plant to 175 000 bpd. It recently signed a US$1.7 billion contract with TechnipFMC to supply designs, supplies and construction. A further US$500 million will also be spent to increase Midor’s LPG production by 145 000 tpy, benzene by 600 000 tpy, and jet fuel by 1.3 million tpy. The Midor complex exports to international markets through the nearby Dekheila port. The government of Egypt is expanding Dekheila to handle greater volumes of container ships and bulk vessels.

Algeria’s oil production and exports have been falling over the last decade, and now stand at approximately 1 million bpd and 500 000 bpd, respectively, primarily through a lack of investment and blockades to foreign investment. Gas production remains high at 91 billion m3/yr, however, three new fields – Touat, Timimoun and Reggane – are set to add 9.3 billion m3.

Early in 2018, Total announced that it had reached an agreement to build a polypropylene plant in the Arzew region of Western Algeria. The US$1.5 billion plant will have a capacity of 550 000 tpy of polypropylene and 650 000 tpy of propane gas. Output will be sold domestically and in Europe, necessitating expansion of dock and storage facilities in the Arzew port.

This article was originally published in the Winter issue of Tanks & Terminals. To read the full version, sign in or register for a free trial subscription.

Written by Gordon Cope, Contributing Editor.

Read the article online at:

You might also like


Embed article link: (copy the HTML code below):