Tuesday, February 20, 2024

Petroleum Enterprise to construct its 14th oil depot in Dire Dawa

Photo by Anteneh Aklilu

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By Eyasu Zekarias

Reports indicate that the Ethiopian Petroleum Supply Enterprise (EPSE) has made compensation payments to the Dire Dawa city administration for the construction of the country’s 14th oil depot. Esmlealem Mihertu, CEO of EPSE, announced that this new fuel depot, expected to cover an area of 16,000 square meters, is now operational with a capacity of 300 million liters. The total investment for the project is estimated to exceed $150 million.

EPSE, the government’s development organization and sole fuel supplier, has been placed under the supervision of the Ethiopian Investment Holdings. As the national oil demand has grown in tandem with the economy, there has been a need for expanding and constructing oil infrastructure, including terminals, storage tank farms, pipelines, and other logistical facilities.

Mihertu explained that the primary purpose of the depot in Dire Dawa is to facilitate operational activities. It will serve as a hub where oil from Djibouti is unloaded and subsequently distributed to different parts of the country. The depot is intended to function as a wet port.

Furthermore, Ethiopian Investment Holdings (EIH) has signed a Memorandum of Understanding (MoU) with a company called AD port to jointly implement the project in Dire Dawa.

Mihertu emphasized that the new project will significantly increase the country’s oil capacity and enable additional activities, as it has the potential to hold twice the amount of the existing depots. The company has completed the design and investment study and is prepared to commence the project once the land handover is finalized, which is expected to occur within the next two years.

The Ethiopian Petroleum Supply Enterprise (EPSE) is a government development company registered at the national level. Its primary mission is to supply refined oil products to the country. Initially established in 1967 as the “Ethiopian Petroleum Association Company,” its purpose was to import and refine crude oil within Ethiopia through its own refinery.

For the past 56 years, EPSE has been fulfilling its mandate of providing sustainable refined petroleum products to Ethiopia, including gasoline, kerosene, light fuel oil, and heavy fuel oil. To achieve this, the company has consistently participated in international tenders, procuring most of its oil products through Djibouti. This is due to the strong trade ties between the two countries and Djibouti’s strategic location as a port, essential for landlocked Ethiopia.

EPSE also obtains some oil and gasoline products from Kuwait Petroleum Cooperative and Sudan Petroleum Corporation. These products are primarily distributed through the oil depot located in Dire Dawa.

In recent news, EPSE has signed a memorandum of understanding to collaborate with Nile Petroleum Company Ltd. Nile, a state-owned oil company, used to supply gasoline to Ethiopia at a lower price. However, this service was suspended for the past two years due to the peace crisis in Sudan. The recent agreement between the two government institutions aims to revive this supply arrangement.

Additionally, EPSE faced delays in the supply of liquefied petroleum gas (LPG) used for cylinders due to foreign currency constraints. The agreement with Nile includes provisions for Ethiopia to provide the necessary foreign currency and resume the interrupted facilities.

Through these collaborations and efforts, EPSE strives to ensure a steady supply of refined oil products to meet the country’s energy needs.

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