HARGEISA Feb 13 PetroTrans, a Chinese oil
and gas producer could conclude preliminary negotiations with
Somaliland for the extension of the key port of Berbera by the
end of this year, but has scrapped plans to build a liquefied
natural gas facility.
Philip Hirschler, a legal adviser for PetroTrans, said from
London the firm planned to extend Berbera port's container and
mineral export services following an agreement it signed with
the government of the breakaway enclave of Somalia last August.
The Horn of Africa has been attracting increased investments
in exploration by foreign oil firms, due to its proximity to
east Africa, where oil has been discovered in Uganda and natural
gas found in Tanzania.
The Hong Kong based company had planned to build gas
pipelines from the field and at least two trains and LNG tankers
for possible export of the product.
"Some of the project that was initially proposed such as the
LNG facility, could not go into Berbera because it would be
impossible to get any insurance on the facility," Hirschler
"We're still talking about (developing) a container port, a
dry cargo port, and a mineral export port, once there's
sufficient minerals development in Ethiopia or further west."
Ali Omer Mohamed, General Manager of Berbera port, told
Reuters he expected the completion of preliminary negotiations
with PetroTrans on Berbera's extension by the end of this year.
"I expect studies, contracts and agreements to be finished
this year," Mohamed said.
PetroTrans signed four petroleum exploration and production
sharing agreements with the Ethiopian Ministry of Mines in July
2011, paying $130 million for the rights to explore Blocks 3, 4,
11, 12, 15, 16, 17 and 20 in the Calub and Hilala Gas fields in
the country's eastern Ogaden region.
Somaliland is an internationally unrecognised state that
declared independence from Somalia in 1991, and hopes the deal
will create thousands of jobs, raise its profile and attract
more investments into the region.
Hirschler said PetroTrans had approached neighbouring
Djibouti on whether it could build an LNG facility there, but
discussions were still in an early stage. Djibouti serves as a
port for its landlocked neighbour Ethiopia.
Hirschler said PetroTrans was also negotiating with South
Sudan's government to build an oil pipeline from South Sudan
oilfields to the Port of Djibouti.
South Sudan, which seceded from Sudan last year, said on
Thursday it was considering building an oil pipeline through
Ethiopia and Djibouti. South Sudan produces about 350,000
barrels of oil per day and exports via Sudan to a Red Sea port.
(Editing by James Macharia and James Jukwey)