CAIRO - 12 August 2023: The Maritime Transportation Sector at the Ministry of Transport announced in May and June that physical bunker supply licenses had been issued for Geneva-headquartered Minerva Bunkering and Dublin-based Peninsula, respectively, to provide bunkering services at Egyptian seaports. The companies were selected through a global auction held jointly with the Ministry of Petroleum and Mineral Resources, Suez Canal Authority, and the General Authority for the Suez Canal Economic Zone (SCzone). The licenses do not just include seaports but also vessels navigating the Suez Canal within both the northbound and southbound convoys. The press statement underscored that the issuance of the licenses "are in fulfillment of the directives of the President of the Republic to turn Egypt into a regional hub for energy trade, bunkering, and maritime services."
Who are the very first operators?
Minerva Bunkering has an annual physical delivery capacity of 25 million metric tonnes of fuel, operating at 30 ports located across the Americas, Europe, Africa, Asia, and the Middle East. Those are located in Canada's Vancouver, U.S. East Coast, U.S. West Coast, U.S. Gulf Coast, Panama, Caribbean, Brazil, Germany, Spain's Las Palmas, Gibraltar and Tangier's Med, South Africa, UAE's Fujairah, Singapore, and Malaysia. Further, it manages a trading footprint covering 150 ports in over 50 countries.
Minerva owns and operates the world's largest portfolio of fixed assets in the bunkering industry, as it possesses a fleet of 44 vessels with an average age of less than 10 years. Thirty-five of those are owned. Of which, 33 are ocean-going tankers and two are non-propelled barges.
As for storage, the company controls 1.9 million cubic meters of storage capacity as it owns two purpose-built storage terminals in Fujairah and Las Palmas. That is in addition to long-term capacity rights in Panama's Balboa, and an exclusive 25-year lease of capacity in Tangier Med, given that Morocco represents its storage and blending hub in the Mediterranean.
Peninsula delivers physical supply at 20 ports, has total tank storage of one million cubic meters, and 40 vessels, both owned and chartered. The ports include Spain's Algeciras, Barcelona, Cadiz, Malaga, Tarragona, Tenerife and Las Palmas, Germany's ARA, UAE'S Fujairah, Gibraltar, Sweden's Gothenburg, Malta, Panama, Mauritius' Port Louis, and Scotland's Skaw.
The auction attracted 10 bidders. Of those three were selected to receive four licenses, as each of Minerva Bunkering and Coral Energy are expected to get licenses to operate in ports on the Red Sea.
Minerva Bunkering got the license in May to launch its services at the Port of East Port Said, while Peninsula received the license a month later to operate in the same port. The latter indicated in a statement that its products are VLSFO, HSFO 3.5% and LSMGO, all according to ISO8217:2017 specification.
The former said in a statement that it had got a license to operate in Suez Canal waiting anchorages, and 12 Egyptian ports, including East and West Port Said, Alexandria, Damietta, Suez, and Sokhna. The products it offers are VLSFO, HSFO, and MGO, and its physical logistics assets are five \'modern owned and operated" bunkering tankers, and a 150,000 deadweight (DWT) floating storage unit.
Minerva CEO Tyler Baron said, "With more than 23,000 vessels transiting the Suez Canal each year and significant additional vessel traffic calling domestic ports, Egypt represents one of the world's most strategic maritime markets." According to the U.S. Naval Institute, the Suez Canal carries 12 percent of global trade.
Not Just Bunkering
Chairman of the Suez Canal Economic Zone (SCzone) Walid Gamal Al Din stated in May during his participation at the EBRD's 32nd Annual Meeting and Business Forum that green fuel bunkering would be available soon, as a number of MoUs were signed to establish green hydrogen and green ammonia plants. The first of which began operation in November during COP 27 with a capacity of 100 megawatts.
In 2022, Egypt signed 23 MoUs in the field of green hydrogen production. Of those, 10 were converted into framework agreements, including nine whose value is $85 billion and that would create 45,000 direct jobs and 230,000 indirect jobs.
President Abdel Fatah al-Sisi announced in November at COP 27 in Sharm El Sheikh the operation of the first phase of Egypt's hydrogen plant, which had been established in partnership with Norway's Scatec. The plant is located in Ain Sokhna, and the capacity of its first phase is 100 megawatts.
In a meeting with President Abdel Fatal al-Sisi, Head of Maersk, Søren Skou, discussed in September the updates of a plan to establish a project for producing clean marine fuel in Egypt with investments worth $15 billion. And, it is estimated to create more than 100,000 job opportunities in various specialties.
The plan refers to the memorandum of understanding (MoU), whose signing was attended by Prime Minister Mostafa Madbouli in March 2022, on producing green hydrogen that would be used to fuel ships.
The signing parties are Maersk on one hand, and the General Authority for Suez Canal, the Sovereign Fund of Egypt, the New and Renewable Energy Authority, and the Egyptian Company for Electricity Transmission on the other hand.
Egypt also targets to produce green methanol and green ammonia, specifically as marine fuels, given the distinctive location of Egypt as well as the other qualities that qualify the country to be an energy and maritime hub.
A Maersk representative stated that the company was preparing 12 ships to be powered by green hydrogen, and that it was interested in building a plant that would produce green fuel in Ain Sokhna's economic zone. She added that Maersk targets to attain zero carbon emission by 2040.
Data of the International Maritime Organization (IMO) show that global bunker sales in 2021 recorded 224.8 million metric tonnes. Fuel oil composes 81.9 percent of the market, while the share of diesel and gasoil is 12.1 percent, and that of LNG is 5.9 percent. The sales of environment-friendly fuels, including ethanol and LPG among others, totaled 212,351 metric tonnes. Although the percentage is still small in the overall, the figure jumped by 91.3 percent.