Hellenic Shipping News: Tanker Market to Benefit from Growing African Oil Product Trades

26 May 2015: “In a recent report, shipbroker and analyst Poten & Partners, noted that over the past five year, the refined product trades into sub-Saharan Africa have increased dramatically. Based on the outlook for product demand relative to projections for African refinery output, the outlook for the next five years is also quite promising, driven mostly by the traditional powerhouses of South Africa and Nigeria. ;Given the port and terminal restrictions of most of the countries in Africa, MRs, Handys and smaller product tankers are the vessels of choice to distribute the product around the continent. However, larger vessels are also utilized, mostly for lightering purposes. For example, fully laden Panamax sized product tankers (LR1s) are regularly taken to Lagos (Nigeria) from where small 15 – 25,000 dwt tankers shuttle the product to other Nigerian ports like Warri and Port Harcourt’, said Poten. “Poten said that ‘refining capacity in Africa is very limited (around 2.2 million barrels per day) and has not changed much over the last 10 years. Most of the refineries in Africa are small (< 50,000 b/d), old and unsophisticated. They are in relatively poor condition due to years of under-investment and neglect and run at extremely low utilization rates. Some refinery expansions and new capacity is planned, but little is expected to come on stream within the next five years’. “For instance, Poten noted that Uganda, Angola and Nigeria are all expecting to have a total of three new refineries (one for each country) in the coming future, with Uganda’s one, primed to be the country’s first ever installation of this type. “’Steady growth in African product imports will continue to provide support to the medium and long range product tanker segments’, Poten concluded.”