SUSAH SECURES PORT
January 2020 – A major new port project is underway in Libya, with the developer leveraging a wide-range of complementary skills, as AJ Keyes confirms.
Michael Guidry is used to working in difficult circumstances and getting the job done. A specialist in security services in some of the world’s most dangerous locations, he may not be the obvious choice to develop a new, largescale port and logistics centre, but upon closer inspection of his skills, knowledge and capabilities, then the decision is actually highly logical.
Libya is a country that has been beset with political and social turmoil for the past decade and the quality of its ports infrastructure is, unsurprising, poor. However, Mr. Guidry has a vision for this country. “There is tremendous potential in Libya and it just needs to be unlocked – it needs the infrastructure to able to positively improve its trade position,” he states, adding, “And if we can meet our goals then we will help the country and its people towards a safer, more secure economic and social future.”
So, a plan to develop a new port serving the oil and gas industries primarily, before then, in time, handling dry bulks, containers, general and project cargo and ro-ro is certainly a positive step in Libya reconstructing itself and developing economically and socially.
Mr. Guidry has a plan that involves utilising his specialist knowledge of security services and applying it to the port industry by developing “Susah Secure Port.”
The proposed Port of Susah has been planned since 2007 during the Gaddafi era, but conflict and civil war delayed its implementation. However, the project was finally awarded in December 2015 following an international tender to The Guidry Group on a design-build-operate-transfer (DBOT) basis. a 35-year (plus 5-year additional term) sovereign contract was signed with the Ministry of Transportation in Libya in May 2019.
Mr. Guidry outlines the project start-up in more detail. “Susah Secure Port consists of two phases. To begin with, Phase 1 is expected to include an oil and gas terminal, interconnecting to a proposed new pipeline and tank farm, with a quay length of 1,350m consisting of 3 berths of at least 400m each.”
He then explains how the project is expected to develop. “Susah Secure Port will initially support the oil & gas industry, which are the key products that will drive economic development in Libya, with phase two then providing high-quality infrastructure for general cargo, container handling and bulk goods.”
There are two key questions that certainly need to be clarified here. First, the issue of security and second, whether the cargo demand exists in Libya and to support the project.
The first matter is very straight forward. The Guidry Group can successfully show 35 years of security experience, supported by Lloyd Guidry’s extensive capabilities of insurance services gained over more than 30 years across some of the most challenging environments and situation in the world.
On this basis, leveraging The Guidry Group’s security capabilities and ensuring that the port operation is secure is clearly a key component, but it will safely enable the facility to be developed and then used.
Moreover, if products, like oil are part of the equation and which involve the use of new pipelines, then protection of this additional infrastructure also falls within the remit of the security capabilities The Guidry Group offers.
Which leads to the second key factor about whether sufficient cargo demand exists to support the development. Sam Boyd Williams, Associate Director with WSP in London, confirms that the potential and outlook for Susah Secure Port is positive. “Libya’s economy is driven by petroleum, in particular crude oil production. Therefore, oil is the primary market for Libya’s ports and can be the focus of the first phase of Susah,” he states, adding, “The port’s deep water and location put it in a prime position to ship out the crude oil from the Eastern Sirte basin, but it will need a pipeline from the major oil fields.”
The pipeline outlined by Boyd Williams is a key component of the planned infrastructure to be developed, with the flow into Susah from other regions where water depth and port capabilities greatly limit the sizes of vessels that can call. This position is limiting the product flow by ship and increasing the waiting time of vessels wanting to call to existing, congested ports.
It is also possible to get a good understanding of the potential oil activity that could exist, according to Mr. Boyd Williams. “Prior to 2011, Libya was producing between 86.7-95.0 million tonnes of oil equivalent (mtoe) of crude oil in the period 2005-2010.
In 2011, production fell to 22.1 mtoe before recovering to 76.2 mtoe in 2012 after which it was in decline again due to the civil war and then decreased further to about 20.8 mtoe by 2016. In recent years production has improved to 46.1 mtoe in 2017 and 53.4 mtoe in 2018.”
Figure 1 confirms these comments and identifies that there is already an existing market that can be tapped into by Susah Secure Port.
In addition, it should also be remembered that the volume levels are now being achieved with the current older port infrastructure and pipelines and only limited sizes of ships able to call. These are issues that Mr. Guidry says Susah Secure Port will remedy.
There are other clear advantages to be offered by Susah Secure Port, as Mr. Guidry confirms. “With 18m of water depth, the port will be capable of receiving larger tankers, which cannot access existing facilities in the country.”
He is correct because Tobruk’s water depth limited to just 9m and a tanker of 170,000DWT requires a draft of 17m, which clearly suggests that the vessels are operating inefficiently below full capacity and/or having to anchor some distance off the coast and then smaller ships are acting as lighters, transferring the cargo – a painfully slow, expensive and potentially dangerous method of operation.
It should also be noted that Susah Secure Port will be constructed to the internationally-acceptable construction standards. A new facility, with modern equipment and infrastructure will set it apart from the very old maritime facilities in Libya. The same applies to the pipeline that The Guidry Group plans to construct and secure.
By comparison, existing pipelines in the country have seen no investment, maintenance or repair since long before the country’s civil war and are old and insecure – if they have not been destroyed during the recent civil unrest. Add these factors to the new port infrastructure and this port development is considerably more appealing to potential users.
Phase 2 of the project is expected to move into other cargo activities and the demand exists, as Mr. Boyd Williams confirms. “Grains are a significant, steady import flow for Libya, with the country importing between three and four million tonnes of agribulks per annum. Given the need for a secure and reliable supply, grains could be a secondary market for Susah Secure port. In addition, general cargo and vehicles and containers on a multi-purpose service are also expected in the second phase, all playing a key role in the rebuilding of the country.”
Mr. Boyd Williams further highlights that the other cargo being imported in Libya at present, namely excluding major bulks, totals around 3.5 million tonnes. It comprises construction materials, food, transport equipment and other goods for domestic, commercial or industrial consumption. These commodities are largely transported via general cargo or container, with the key factor once again being the quality of available port facilities.
The WSP executive explains further. “Containerised goods include clothing, electronics, consumer goods and food. These are of direct demand for the population of Libya, as the country lacks domestic production capacity. Industry can also demand containerised goods, such as equipment and parts or intermediate goods used in manufacturing.”
Libya’s current population is estimated to be around 6.5 million people and the location of Susah Secure Port indicates access to an estimated 25% of the country’s inhabitants within its immediate hinterland. Overall, there is certainly an existing, if somewhat relatively small, local population that needs to be satisfied.
Of course, the development and subsequent construction of Susah Secure Port will increase demand for products such as cement, iron & steel and consumer goods to support the anticipated workforce – and this is just for the initial phase.
Subsequent development into phase two and beyond, will again boost these important areas of both cargo demand and economic development, while bringing employment to the region and country.
Once again, in the early years of the project and then as it subsequently expands and develops, the provision of safe, secure facilities and operations reinforces the key role to be played throughout by The Guidry Group.
Mr. Guidry maintains that Susah Secure Port is a “first-of-a-kind (scale, profile, magnitude), impactful infrastructure and will position Libya in the 21st century with modern infrastructure.”
On this basis he is correct, but his vision is clearly longer-term. “We have the opportunity to use this project to generate an epicentre of the oil, gas and other cargoes in East Libya. It can be a regional trade and logistics centre and a future gateway for trade to Sub-Sahara Africa, but more than anything else, Susah Secure Port is an unprecedented opportunity for the economic revival of Libya and for all of its population to benefit.”
This is a country that requires better quality port facilities that can receive larger vessels for wet and dry bulks and, in time, container, general cargo and ro-ro ships, along with supporting infrastructure such as pipelines to move essential products like crude oil.
Given the recent history of conflict and insurgency, Susah Secure Port represents an important step in developing much-needed port infrastructure in a security conscious and responsive environment that will allow the country to be rebuilt.
Reporting by: Port Strategy