STATUS OF DJIBOUTI'S DORALEH PORT

UNCLAS SECTION 01 OF 02 DJIBOUTI 000095

SIPDIS

STATE FOR AF/E

E.O. 12958: N/A
TAGS: PREL DJ
SUBJECT: STATUS OF DJIBOUTI'S DORALEH PORT

1.On January 8, 2006, Ambassador, DCM, the Acting
Pol/Econ officer and LES Econ assistant visited
Djibouti's new, still under construction Doraleh
Port (to contain fuel and other liquid storage
tanks, a refinery, a power plant, a container
terminal and a duty free zone). Doraleh is a
project important to Djibouti's president, Ismail
Omar Guelleh, who envisions the eventual complex,
built by Horizon Djibouti Terminals Ltd. under
the direction Dubai Ports World (owned and
therefore directed by the United Arab Emirates)
as key to the economic development of Djibouti.
Representing Horizon were Alain Siozac, the
General Director of the new port, and his
assistant, Terminal Manager Ayanleh Idriss.

2.The new Doraleh port facility will have 28 tanks
when Phase 2, the construction of eight tanks, is
completed in July 2006. The tanks are designed
to contain refined petroleum products (Gasoline,
Diesel, Jet A1, etc.),LPG, chemicals, edible
oils, molasses or ethanol. At this time the US
Navy leases six tanks containing ship and
airplane fuels. However, because the terminal
does not yet meet Navy/international security
standards, USN (and US merchant) ships are not
taking on fuel at the port. The port is working
to correct security deficiencies, which focus
primarily on the perimeter wall and access
controls. An additional three tanks now contain
Ethiopian ethanol that is destined for European
markets. The port director said that the port
will be able to load products onto fuel trucks
starting in February 2006.

3.The Government of Djibouti (GoD) initially
y
requested Total and Shell (and Mobil, which has
agreed to sell its stored products and Djibouti
gas stations to Total, thus ending Mobil's
presence in Djibouti) to transfer petroleum
products currently stored at the old Djibouti
port to Doraleh before the end of December 2005.
However, the firms were given an extension
because Doraleh port was not ready then to accept
the fuel. Horizon is negotiating a new time for
Total and Shell product transfer and expects this
to occur no later than the end of July 2006.
Total and Shell will be permitted to store fuel
only for their local Djibouti markets (some
200,000 barrels per month). Ethiopian fuel
requirements (2.2 million barrels per month),
currently met partially by Total and Shell, have
been awarded to Emirates National Oil Company
(ENOC). Total and Shell may purchase fuel from
ENOC and sell it to Ethiopians, if they choose.

4.The container terminal construction and
management responsibility will fall under Dubai
Ports World. DPW states that Chinese, Brazilian
and French interests are among the bidders to
construct the container terminal. It is said
that the Chinese are offering to finance the
project.

5.Electricity and water are important issues in
this deficient-in-both nation. DPW plans to
construct on site both a power generating plant
and a desalinization plant, and included both in
the bid package for the container terminal. The
Djibouti electric company offered to supply the
terminal's power needs because they are
separately receiving funding from Arab donors to
upgrade power capacity. This was not considered
a viable option by DPW due to its extensive power
requirements and its view that it needs a
confident, independent supply. (Comment: This
cable's drafter also served in Djibouti 1990-
1992, during which time he remembers power cuts
perhaps ten times during the two year assignment.
The day before drafting this cable, power to his
residence was cut five times, albeit during
unusually rainy weather with flooded streets. End
Comment)


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