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Content
01 Background of the project
04 Cooperation concept
DJIBOUTI 1. Background - Traditional friendship of Djibouti and SaudiArabia
• Djibouti, with a population of 875,000 people and the size of only 23,000 square kilometers, is located at a strategic point, linking the Red Sea to the Gulf of
Aden. Djibouti is an increasingly vital economic and energy hub– a path through which 10% of the world’s oil exports and 20% of commercial exports pass
annually.
• The strategic cooperation between the two countries started with the visit of President Ismail Omer Guelleh in Saudi Arabia. On October 15, 2015, King Salman
and President Ismail Omer Guelleh held talks in Riyadh on bilateral relations and on the developments in the region. President Guelleh presented King Salman of
Saudi Arabia with the Djibouti Grand Star, Djibouti's highest award, in recognition of the king's efforts in the service of issues of Islamic and Arab nations.
• Two memorandums of understanding (MoUs) and a bilateral agreement were signed on the sidelines of a Saudi-Djibouti businessmen forum in Djibouti on April
21, 2017. The MoUs were signed to rehabilitate King Fahd Road in Djibouti.
• On April 26, 2017, Saudi Arabia and Djibouti signed a cooperation agreement in the military field, aiming at enhancing military cooperation between the two
states, was co-signed by Deputy Crown Prince Mohammed bin Salman bin Abdulaziz, Second Deputy Premier and Minister of Defense, and his Djiboutian
counterpart Ali Hasan Bahdon.
DJIBOUTI 1. Background - The national strategy of Djibouti: "developing economy and improving
people' s liveling"
Since 2013, Chinese investors such as China Merchants Group has worked with the Djibouti government to develop infrastructures
such as ports, logistics, railways, highways, banks, bonded areas, free trade zones and industrial parks, which have greatly improved the
economic performance of Djibouti and objectively provided a solid supporting security for the construction and operation of refineries.
Djibouti will eventually become the regional hub for shipping, logistics and industries. And become an Important Strategic pivot
for China's “ One Belt One Road “ Strategy.
Damerjog
Industrial
Silk Road
zone
International
Free Trade Bank
Zone
Old Port
Regeneration
DMP
Railway
DJIBOUTI 1. Background – Supporting Infrastructures
South Line
Damerjog Heavy
Industrial Zone
(30KM2)
The straight line distance from Damerjog Heavy
Industries Zone to the port of Djibouti is about 10 km,
and 1 km to the Somaliland border. The N2 road
crosses the block and stretches to the border with
Somalia.
DJIBOUTI 1. Background – Master Plan
Regional development mode: "Electric power, desalination" as the core services supporting the development of the formation of cement,
chemical, steel, oil refining and other industrial clusters, to form a closed-loop industrial chain, and quickly promote the establishment of regional
industries and regions economic development.
Product
Salt Exhibition
Chemical Center
Bonded
Industry logistics
Djibouti Free Trade
Zone DICT
Light
(Mainly light industry) real
Industrial
estate 自贸区
Industrial
Park
food
首发区(6.35平方公
processing
里)
N1
Steel
Oil refining industry
Chemical
industry industry
infrastructure
Port
Damerjog Industrial Zone
(Mainly heavy industry) Power
Cement
industry Plant
Slag utilization, power supply Shipyard
public facilities
DJIBOUTI 1. Background - The strategic deployment and preparation for refining project
The establishment of Damerjog Industrial Zone, special preferential policies for refining projects, including tax relief, lower land rent, etc ;
The construction of oil terminals, power plant and desalination plant in the industrial zone and 300,000 cubic meters of oil storage tanks, provide complete
facilities for oil refining projects;
Invest jointly with chinese petrochemical enterprises in the construction of refinery projects, built world-class refinery plant, the joint management and co-
operation of China and Djibouti parts;
Fully open the refined oil market of Djibouti for the oil refinery project, explore the neighboring markets such as Ethiopia, omaliland, Somalia, Kenya and South
Sudan and expand its market capacity.
DJIBOUTI 2. Introduction of Damerjog Industrial Zone
The first phase of construction, planning and construction of a 2 × 60MW coal-fired power station, the fuel is from South Africa and
Mozambique coal. Power station ash will be the raw materials of the cement plant.
Up to now, the feasibility study report of power plant project has
been completed, the PPA negotiation and financing negotiation are
under way.
Damerjog Desalination plant:
The scale of the desalination plant is 4 million tons / year,
providing industrial fresh water for various industrial projects in the
zone. Production capacity : 500 tons of fresh water / hour.
DJIBOUTI 2. Introduction of Damerjog Industrial Zone - Commercial Storage Tanks Project:
Through the support of large industries and the economic development of the surrounding industries, the following effects on
the overall economy of Djibouti are expected to result:
Economic •GDP reach to 1.735 billion USD • GDP reach to 3 billion USD • GDP reach to 6 billion USD, •GDP reach to 10 billion USD,
•GDP per capita is 1886 USD • GDP per capita reach to 3000 USD • GDP per capita reach to 6400 USD •GDP per capita reach to 10000 USD
development goals: •Attract 647 million USD of foreign • Attract 1.2 billion USD of foreign direct •Attract 2 billion USD of foreign direct •Attract 3 billion USD of foreign direct
direct investment. investment investment. investment.
Industrial • Introduct and develop the • Optimize the industrial structure and layout, realize the modernization of industrial
manufacturing industries in the first three and economic systems, and complete the construction of large-scale industrial
development goals: years, industrial output shall increase by ecosystems in the region.
300 million US dollars
Social • Provide 5000-8000 jobs •Provide 10000-15000 jobs •Provide 15000-20000 jobs
• Cultivate 2,000 elite national political •Cultivate 5,000 elite national political •Cultivate 8,000 elite national political
development Goals: and economic management talents and economic management talents and economic management talents
DJIBOUTI 3. Introduction of Damerjog Refining Project - Target market analysis of refined oil
products
Besides, Kenya, South Sudan and Eritrea are potential target markets where we would like to complete.
Ethiopia
In 2017 the Ethiopian oil consumption is expected to about 73000 barrels / day. In recent years, Ethiopia sustained rapid economic
growth, the average annual growth rate reached 10.6%. The shore oil dock in Djibouti and reach Ethiopia by truck .
Somalia
At present, there is no oil refining facility in Somalia, and the consumption of refined oil is about 6000 barrels per day .
Eritrea
The consumption of refined oil is about 4700 barrels per day.
Kenya
The demand for refined oil in 2016 was about 360000 barrels per day. A large amount of oil resources were found in the Turkana region
of Northwest Kenya in 2012 . It is expected that from the second quarter of 2017, the region's crude oil production will reach 2000 barrels /
day, and gradually reach 10000 barrels / day production, the entire oil reserves are expected to reach 750 million barrels .
DJIBOUTI 3. Introduction of Damerjog Refining Project - nature of the crude oil
Africa AFRI-4 150 n/a n/a 1.0 n/a 91 n/a n/a 2020
AFRI-5 50 n/a 42 1.0 n/a 91 65 0.75-0.78 2030
Djibouti 10 n/a n/a n/a n/a 91 69 0.705-0.75 Active
DJIBOUTI 3. Introduction of Damerjog Refining Project - Diesel, aviation kerosene quality standards
Typical diesel standards
Flash Point
Sulfu FAME PAH Cetan Cetane Densit Effectiv
Region Name (close cap)
r v% wt% e Numbe y e
℃
ppm Index r t/m3 time
GB-V 10 60 1.0 11 46 51 0.81-0.85 Active
Chinese
GB-VI 10 60 1.0 7.0 46 51 0.81-0.845 2019
Characteristics Limit
Aromatics,vol%,max 25
Sulfur,mass%,max 0.30
Smoke Point,mm 25
DJIBOUTI 3. Introduction of Damerjog Refining Project - Marine fuel oil quality standards
Sulfur
Recovery Sulfur
VBU VB Naphtha Unit
Marine
Marine Fuel RMG 380
* Sketch Process Map with Main Streams Only Fuel
DJIBOUTI 3. Introduction of Damerjog Refining Project - SWOT analysis, capacity forecast of the
refinery project
Weakness:
Djibouti is lack of local refining infrastructure, lack of Theat:
industry-related experience; Damerjog oil refining project can obtain sustainable, stable
Lack of reserve of professional and technical personnel in and cheap crude oil resources or not;
the refining industry and lack of skilled industrial workers; International crude oil market, a substantial price
Lack of industrial support capacity; fluctuations;
Damerjog oil refining project operating costs are high;
DJIBOUTI 3. Cooperation concept
It is suggested that Saudi Aramco, the government of Djibouti and China Merchants Group jointly develop the Damerjog
refinery project and establish a strategic partnership between the three parties to promote the implementation of this concept. The
initial concept of project cooperation is as follows:
In the first ten years, ARAMCO provides crude oil assistance to the Djibouti
government at a scale of 50,000 barrels / day
• Acquire 20% shares of the project company. Damerjog Refining Project is expected to reach 200,000 bbl / day of processing
and sales after full preparation of regional markets such as Djibouti, South Sudan, Sudan, Somalia, Somaliland, Ethiopia and
Kenya; for the additional 150,000 b / d of crude oil demand , Priority purchase fromARAMCO.
The Djibouti government invests in the Damerjog refinery project and offers
various preferential policies for the project
• Acquire 30% shares of the project company. Fully open the Djibouti refined oil market for the Damerjog oil refinery project
while carefully exploring and operating the neighboring markets and expanding the market capacity.
China partners will plan, invest, operate and manage the project
• Acquire 50% shares of the project company.
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