A new level of efficiency

Ghana

Felix Nana Sackey, group CEO of Ibistek, talks to The Energy Year about the operational advantages of the company’s new liquid bulk terminal (LBT) in Takoradi and its strategy for attracting new business. Ibistek is an indigenous provider of engineering and logistics services to the energy industry.

What is the current state of your new LBT in the Takoradi Port?
Our Takoradi bulk oil terminal is currently in operation. We’ve completed the testing stage. We had the first two tankers call in the last week of July 2021. The discharges were very successful, and the facility is performing very well, as we expected. It is very fulfilling to have the jetty at this stage and everything is working according to plan.
The terminal has five automated loading arms for petrol, diesel, LPG, heavy fuel and bitumen, and the berthing has a capacity to handle vessels carrying up to 50,000 dwt of cargo. It has the capacity to service more than 50% of Ghana’s domestic petroleum demand.

What are the LBT’s main operational advantages?
It is West Africa’s largest liquid bulk terminal. It is fully automated, from the loading arms to the valves and the connectivity to the tank farms. This LBT is about four times more efficient compared to the existing facilities in West Africa.
Because of the facility’s automation and size, it can discharge 10,000 tonnes within 12 hours, while the old one took about a week to discharge the same volumes. The vessel turnaround time is much quicker. The dimensions of the pipelines from the jetty to the manifold are 18 inches; which is significantly huge.
In terms of the economics, brokerage companies, bulk distributors and cargo owners will benefit significantly through the efficiencies provided by this facility, thus enabling them to have good cost savings in their operations. This is in reference to the various demurrages, the hiring charges of vessels as well as other service charges which they made previously to the Ghana Ports & Harbours Authority.

Will the automation process allow for more transparency in the distribution business?
The terminal has an automated SCADA system, which can measure all variables. Once the vessel starts discharging, you can track the flow of product to a particular tank farm. The system also has a metering system as a backup, positioned at the manifold area, measuring all products flowing from our facility to the pipelines of the cargo owners.
Since the process is fully automated, there is no need for people to stand on the line while discharging. With a simple press of a button in the operations room, the valves on the lines are opened all the way to the client’s asset.
Knowing the actual quantity that a vessel discharges brings transparency and benefits for everyone; including the Ghana Ports & Harbours Authority, the Ghana Revenue Authority or the cargo owners alike. Gone, therefore, are the controversial days of using dips, with surveyors checking the quantities received at a tank farm. These processes are now executed with maximum transparency and the barest human interventions, and thus a very low possibility of human error.

What are the remaining challenges for taking full advantage of the jetty’s new capacity?
The next stage of our activities is to encourage tank farm clients to convert their pipelines to 18 inches, so that they can have the full benefit of the facility. Currently, the biggest pipelines these tank farms have is 10 inches. Ours is 18 inches, from which we squeeze the flow into 10 inches in order for them to be able to receive it. Should they change their pipelines to 18 inches, they would experience the full benefit of the expanded flow.

What is Ibistek’s strategy for attracting new business around the LBT?
Ibistek has a 25-year renewable concession [with GPHA] which has enabled the company to raise the required funds to construct and operate the facility.
With the commencement of the business development component of the jetty and considering the modernised model of the new construction, the strategy has to be different. The existing business model was based on the outmoded jetty.
We are currently engaging with all the bulk distributors in Ghana, and also with international brokers who are looking for facilities to store products in order to take advantage of West Africa’s fuel demand. While existing tank farms are trying to expand on their facilities to bring in more products, brokers are also considering the cost of hiring bigger vessels as against bunkering out at sea.

How will the commissioning of new refineries in the region impact this scenario?
Since the jetty handles both imports and exports, it affords companies the opportunity to import products, pump them into a storage tank farm, then transfer them into vessels for the export market.
We are encouraging entities to develop tank farms in and around Takoradi. It is anticipated that once Nigeria’s Dangote Refinery is commissioned, with its 650,000-bpd planned capacity, there will be a massive demand for storage facilities. It needs no emphasis that there will be a major demand for further storage capacity across the region, since it will not be economically and operationally prudent to store the entire planned capacity in Nigeria.
Ghana has a strategic position for trading into the West African market. Many countries feel more comfortable trading with and thus drawing products from Ghana, since they see the country to be comparatively safer than Nigeria in terms of political stability, piracy issues and internal terrorism.

What opportunities do you see in the development of pipeline connections?
The countries we border to our north, Burkina Faso, Mali and Niger, together with our western and eastern bordered countries Côte d’Ivoire and Togo have minimal access to refined oil products. With the pipeline connections and increased volumes of storage capacity, these countries can source oil products from Ghana.
Presently, trucks from these countries pick products from either Tema or Takoradi and haul them across the cities and towns to their in-country depots. A round trip to and from these locations into their countries is estimated to take about a week, with high logistics costs and diverse risk factors – not to mention the horrible state of the roads and the numerous accidents which occur on them daily.
Our next planned project is to develop a pipeline to connect the tank farms in Takoradi to the tank farms in Kumasi. We then plan to connect the Kumasi tank farms to tank farms up north in Buipe in the Savannah Region and Bolgatanga in the Upper East Region. Once these pipelines are connected, trucks coming from these landlocked and neighbouring countries will only have to travel shorter distances to pick up products.
These are very capital-intensive projects, and we are therefore not able to solely fully execute them on our own. Practically, we are seeking partnerships for the construction and finance aspects as well as on the operation side.

How important is an indigenous company’s track record for attracting investment capital?
There is no denying how challenging it is for indigenous companies to acquire the right funding at a good cost for projects. As a company, we had to prove beyond every doubt to convince lenders that we are capable of initiating, constructing and managing projects. Most lenders commit to favourably considering projects only after they have seen successfully implemented projects in the portfolio of the company.
As a group, we have successfully executed three major infrastructure projects in Takoradi, namely an inland clearance depot, which is worth about USD 80 million; this oil jetty, which is worth about USD 60 million; and an on-dock multi-purpose container terminal, which is worth about USD 210 million, excluding operational equipment for these projects.
Ibistek is governed by a belief system and principle of integrity, by keeping our promises over time. I realise that most multinationals and investors lack confidence in the capacity of the ordinary African, since most African companies have not adequately demonstrated the ability to deliver on certain key infrastructure projects.
A lot of local and regional companies have failed to deliver successful infrastructure projects, losing goodwill and generating a chequered reputation and hence marring every potential to raise project funding. This is one area where the Ibistek Group has successfully established a positive outlook, and thus positioned itself well to attract the attention of international financiers.

What are the company’s growth plans in terms of new markets and revenue?
Having attained the reputation as the first indigenous Ghanaian company to get into the port industry is an impressive feat. Ibistek is looking to expand its operations beyond the shores of Ghana. We have been approached by countries like The Gambia and a few others to explore the potential of collaborations on similar projects. We are giving such requests a strategic review, and then following up with engagements with potential financiers to discuss partnerships for such ventures.
On the subject of revenue, our first priority is to service our current credit facilities. We are intensely driving operations to enable our projects to start generating good revenue to satisfy our financiers and all stakeholders. Once that is done, we aim to introduce our financiers to our other projects.

What are the main challenges and opportunities Ghana faces in trying to become a regional oil hub?
Ghana is ready to become an oil and logistics hub. The biggest challenge is that the country is not selling as much oil as it could. On the infrastructure side, the country has not done enough compared to other African countries. The Tema port is well developed, and the Takoradi port is fast coming up with all of its significant infrastructure developments. When you look at our neighbouring countries like Liberia, Sierra Leone, The Gambia, Togo and Benin, you will realise that although these countries have some fair levels of infrastructure development, their infrastructure is not as efficient as that developed in and operating in Ghana.
We should be able to, as a country, market our available systems better for success. Countries with momentous resources like Nigeria, with all its upcoming projects, do not have the right political and safety environments to nurture the expected stability and the efficiencies which Ghana is currently enjoying. As mentioned, the Dangote Refinery will be completed in the very near future, and in relation to that we should encourage people to set up storage facilities in Takoradi to take advantage of the jetty. Ghana will generate money from the storage facilities, taxes for the government and employment for its people. It’s a win-win situation for everyone.

How much demand is there for Ghana to build an oil base in Takoradi Port?
With all of the oil exploration, we need to service all the vessels coming in and out. But we don’t have any facilities to provide such a service in Ghana presently. Vessels either go to Dakar, South Africa or Angola to get serviced, and then return to our ports. If we are able to set up such a system in Takoradi, close to Ghanaian oilfields, it will bring huge benefits to everyone.
This project has been on GPHA’s radar for a long time. Ibistek definitely has an interest in participating in the tendering process, and we’re ready for it. In terms of opportunities, it’s one of the businesses which is readily available now.

Does the recently approved Petroleum Hub Development Corporation Bill present a viable opportunity for establishing a free zone to set up refining and petrochemicals activities?
I think it’s a tangible opportunity. Whether it happens or not is the real question. It will be a very significant change in the economic structure for Ghana, which has always been based on gold and cocoa.
We all know where petrochemicals can take us. Look at the Emirates, and the wonderful things that they’ve done with petrochemicals. Ghana can do the same. Fortunately for us, we are finding oil every day, and the big multinationals are coming. How will we manage all these offshore discoveries if we don’t have the infrastructure? As a nation, we should make sure it happens.

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