Eng. Yahia Zaki, Chairman of the Suez Canal Economic Zone (SCEZ), has outlined plans to issue bunkering licences for overseas operators to begin offering traditional bunker fuels and LNG bunkers within the SCEZ and hopes to announce the first concluded deal in the first quarter of next year, writes Llewellyn Bankes-Hughes.
Speaking on a live Zoom conference organised by the British Egyptian Business Association (BEBA) and Egyptian-British Chamber of Commerce during a virtual Egypt Week on Monday (9 November), Eng. Zaki told potential investors that the SCEZ is very focused on bunkering, which it considers one of the most important sectors at present.
Eng. Zaki confirmed that the SCEZ is already in discussion with several bunker ‘service providers’, with ‘three to four’ serious expressions of interest currently being closely looked at. These will be on a non-exclusive basis, suggesting that several foreign bunker suppliers could be competing for business in Egypt next year. He also confirmed that the first bunkering licences to allow bunkering operations within the six ports inside the SCEZ could be issued as early as Q1 2021. Currently, the SCEZ is looking into what requirements will be made of potential bunker operators but expects to be offering licences to companies operating both in the northern and southern sectors of the SCEZ.
Eng. Zaki said that the SCEZ is already in discussion with a number of providers and he thinks the market will be open quite soon for this service to be provided. Once bunkering is available, he said, as many as 20 other maritime services would follow, including inspections, ship supplies and crew change.
Responding to questions from Bunkerspot about the long-term downturn in bunker volumes in Egypt, Eng. Zaki said that bunkering is ‘something that we are now restarting. We have lost some time on that, but it is never too late. We are always receiving expressions of interest from companies from around the world, whether from visits to the Economic Zone or through the meetings we have had with them, but recently the tempo has been getting higher and higher with our appetite for opening up the business.’
The SCEZ, which was formed in 2015, has targeted 14 sectors for investment and business opportunities in its five-year plan, from 2020-2025, with bunkering the number one priority, followed by batteries, building materials, textiles, pharmaceuticals, rolling stock, logistics and others.
Eng. Zaki stressed that while there will always be a market for traditional bunkering, ‘we believe strongly that the future is LNG and our deep-dive studies say we should consider LNG within our futuristic approach.’
It is clear that the SCEZ sees the establishment of a viable bunkering offer as the key to further development of the Economic Zone, and an attractive market opportunity, with almost 10% of international trade passing through the Suez Canal on 18,000 ships a year. And it feels that Egypt is well placed for a rise in LNG bunkering.
The SCEZ believes that investors could ‘be pioneers’ in the Middle East and build the first LNG bunkering facility, using the SCEZ’s competitive advantage of its strategic location, ample LNG supplies close to the Canal, and the fact that Egypt and the SCEZ have already established international agreements to develop the LNG bunkering market.