The Gam-Petroleum fuel storage depot will be the largest and most modern in the sub-region, providing a steady supply to The Gambia that will help stabilize prices

The new storage facility will have capacity for six months of reserves of national consumption

Problem number one: lack of a domestic oil supply. Problem number two: insufficient storage capacity for oil imports. These factors have been limiting the reliable supply of petroleum in The Gambia over the last decade, and while domestic oil production still looms tantalizingly on the horizon, increasing storage capacity is not only a possibility but with the new Gam-Petroleum Storage Depot is soon to be a reality. Not only will the new storage facility provide enough capacity to maintain reliable supply in The Gambia, it will also provide for six months of reserves – a first in the country’s history.

The long overdue fuel depot is being built according to international standards with regards to quality and safety and environmental standards. Launched in 2005, the project through its increased fuel storage capacity will have attendant ripple effects on availability and prices which in turn have major bearing on domestic developments. The one existing terminal in the country was built in the 1940s, and has a limited capacity of just one month of national fuel consumption. This has meant that petroleum imports had to be timed precisely. When shipments were delayed, it often resulted in stock-outs, and a stop in supply. Worsening the situation has been the growth of residential areas surrounding the old terminal, creating an environmental hazard for residents.

After winning a tender for the new terminal four years ago, Gam-Petroleum began a comprehensive search for a new location. This was complicated by the fact that much of the suitable areas were located too close to the Gambia River, where the soil was not firm enough. After several tests, the company decided on Mandinari in north Banjul.

“Consequently, we commenced the construction phase for a depot with sufficient capacity for at least six months of local consumption which gives the country a safety cushion in case of world market crisis,” states Gam-Petroleum’s managing director Mohamed Bazzi.

Built according to international standards with SGS certification, the total storage capacity of the project is 51,000 metric tons of light and heavy fuel oils as well as liquid propane gas, and includes 19 loading bays for tanker trucks, three sub-marine pipelines of 2,500 meters each, state-of-the-art technology in gauging and metering equipment and a full LPG bottling plant. The total cost of the project is estimated at €30 million over a three year period. Financing is partly equity from Gam-Petroleum’s holding group, partly from Total International, which will be the exclusive supplier of petroleum products for the new terminal, and partly from European and local banks.

Although initial costs were higher than expected due to special building requirements, Bazzi says that the terminal will pay itself off shortly as it gains in regional significance. He says, “The significance of the project lies in the fact that we have had to build on a very weak soil, thus leading to a much higher civil works cost arising from the need for stronger foundations. This was compounded by the fact that we had to lay three submarine pipelines over a distance of 2.5 kilometers to access a suitable draft for birthing big fuel tankers.

“However, neighboring countries in the sub-region such as Mali and Guinea Bissau, amongst others, are currently accessing their fuel requirements from distant supply hubs at a very high cost, and would be very happy to substitute their supply channels with our terminal, which is better geared to supply these neighboring countries efficiently. Furthermore, we foresee the terminal acting as a bunkering hub for vessels en route to South America and South Africa. It could become a refilling station for those vessels.”

Indeed, the Gam-Petroleum fuel storage depot will be the largest in the sub-region, providing a steady supply to The Gambia that will help stabilize prices and creating a better environment for foreign investors. The terminal will include a storage facility for heavy fuel oil. The only other heavy fuel oil storage facilities in the country are located at the power plants, which has meant extra costs in transport as fuel was tanked to the plants from the ships. Bazzi says that the new depot will eliminate this cost by direct transfer of the heavy fuel oil into the tanks with no waiting period, and that this cost reduction will be felt directly by the consumer in lower prices.