Sunday, February 10, 2013

Somaliland: ‘East Africa’s Red Sea Corridor – Could it become a Major Energy Hub?

Somaliland Sun
Sunday, 13 January 2013 16:28
In light of its geographical position, long coastline and deep sea ports, Somaliland is strategically positioned to be one of East Africa's major energy supply bases and play a key role in the regions energy future.
By: Jieun Wrigley
DUBAI (Somalilandsun) - Africa is increasingly becoming a Energy Minister Eng Husein delivering his key note speechEnergy Minister Eng Husein delivering his key note speechmajor player in the world oil & gas game. Its proven oil reserves topped 132 Billion barrels in 2011 and are 9% of world reserves. Oil production stood last year at 8.8BBOD (10%) of world production. Current proven gas reserves are nearly 14.5 TCM (7% of world reserves) and gas production is up to 202 BCMD (6.17%).
These reserves and production numbers is currently dominated by West and North African countries, but that is all about to change once recent oil & gas discoveries in East Africa such as in Mozambique, Uganda, Madagascar and recently Kenya come online.
Recent world class oil & gas discoveries in East Africa have triggered a renewed interest in E&P companies to flock to the region to participate in its hydrocarbon riches. These discoveries are just the tip of the iceberg since huge swaths of East Africa's basins are still frontier areas that are just starting to open up and have seen little or no exploration. Many potential areas in the region have yet to see the drill bit.
The Horn of Africa region in particular with major discoveries all around it have been ignored by in large until now and have yet to be explored. However, exploration activities in my home country, Somaliland, are beginning to pick up. License holders such as Genel Energy and Ophir energy are set to embark on a major exploration program this year and the following ones that could add up to the burgeoning oil & gas discoveries in the East African region in the not too distant future. Other E&P companies are actively pursuing new licenses in Somaliland as well and are in talks with us.
Given its huge potential, the East African region has the capacity to become the new Middle East and some of this massive hydrocarbon potential once discovered and produced has to come to shore to ship to world markets. This will require huge investments in infrastructure such as pipelines, LNG trains, processing plants and shipping terminals.
The next two decades will see major foreign investment inflows to develop the region's hydrocarbon assets. This investment in infrastructure is necessary if East Africa is to realize the full commercial and economic advantages of its new found hydrocarbon wealth.
Building such an oil & gas infrastructure will require close cooperation and collaboration between the region's landlocked and coastal countries. New bilateral deals have to be struck between these countries to create new energy corridors in the region.
Besides its high probability for oil & gas deposits, East Africa's Red Sea coast sits across one of the world's busiest maritime lanes that connect the Suez Canal and the massive Asian shipping routes. Nearly 21,000 vessels pass thru the Gulf of Aden (formally called the gulf of Berbera, named after the Port of Berbera in Somaliland). Countries with deep sea ports and long coastlines in the region such as Somaliland are ideally located to serve as an energy portal and supply bases for neighboring landlocked countries in East and Central Africa to receive, process, store and ship all that oil & gas.
In addition to hydrocarbon energy, countries in the region such Ethiopia have also massive hydroelectric capacity. Ethiopia alone has the capacity for hydropower development of nearly 45,000 MW.
There is also a massive untapped geothermal potential in East Africa in the Great East African Rift system countries that has the potential to generate 2,500 MW of geothermal energy.
This combined energy potential of the region is only 250 km across the Gulf of Aden from the Middle East where subsea pipelines and cables can connect to Asia as part of a great Middle East/ East Africa energy network.
In light of its geographical position, long coastline and deep sea ports, Somaliland is strategically positioned to be one of East Africa's major energy supply bases and play a key role in the regions energy future.
Jieun Wrigley

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