Energy Capital & Power

Senegal Drives Oil and Gas Trade Through Maritime Logistics Improvements

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Strategically located within regional and international trade routes, and forming part of the Trans-Saharan trade route, Senegal has managed to position itself as an African trade hub. The country’s trade industry relies predominantly on its ports, with the main Dakar port serving as a ‘gateway to Africa’ for global traders. For decades Senegal has been able to maintain a strong trade economy with the export of fish, phosphates, and groundnuts. Now, with the discovery of approximately 450 billion cubic meters natural gas, Senegal’s maritime logistics serve a critical role in the country’s energy sector expansion, scaling up distribution and trade.

Infrastructure Expansion

As Senegal pursues accelerated energy sector growth in response to sizeable discoveries made over the past few years, the growing importance of logistics across the value chain has been emphasized, specifically regarding maritime infrastructure. Notably, the country’s new and existing port facilities can serve as a catalyst for intra-African energy trade.

According to the International Trade Administration, the Port of Dakar is the first major port-of-call from Europe, and thus, serves as a transshipment center for landlocked nations in West Africa. The port has been a critical component of both regional and international trade, enabling the import and export of petroleum products. However, if the country is to realize its energy and trade goals, the significant levels of investment are needed to both expand and technologically improve the port.

Senegal has already directed investment towards maritime infrastructure through the launch of the Port of the Future project – a $1.1 billion superport located 50km southeast of the capital. Technically advanced and operationally efficient, the new port will be critical for the country as it moves to develop its offshore oil and gas reserves. In addition to strengthening logistics regarding resource extraction, the port will open up new opportunities for exporting to global markets while positioning Senegal as a regional logistics hub.

Capacity Building

While maritime infrastructure is critical, manpower development will need to be improved for Senegal’s maritime logistics to help drive energy growth. The country has already managed to establish itself as a regional leader in terms of human resources in the maritime field, primarily regarding fishery activities. However, due to the highly skilled nature of energy maritime logistics, capacity building and skills transfer will need to be facilitated to support the growing industry.

Senegal has introduced ambitious local content targets within its Plan Senegal Emergent (PSE), aiming to enhance domestic skills and the participation of local service companies. This has been met with success, with the country experiencing an upward trend regarding local capacity. Organizations such as the National Petroleum Institute – inaugurated in 2018 – and the Dakar Business School are driving capacity building within Senegal’s maritime logistics field. What’s more, companies such as Bollore Africa Logistics, CMA-CGM, Hapag-Lloyd, and DB Schenker all represent local players enhancing Senegal’s logistics sector. As more domestic companies come on board, Senegal is well on track to not only establish a competitive energy trade sector, but a domestic logistics market.

Trade Agreements

Meanwhile, in November 2020, Senegal officially joined the World Logistics Passport – an initiative that aims to link nations globally while enhancing South-South trade. With a focus on improving trade networks, the initiative will be critical for Senegal, enabling the country to address trade impediments and logistics inefficiencies while opening up new opportunities for global exports.

Additionally, the implementation of the African Continent Free Trade Agreement (AfCFTA) in January 2021 will also serve to enhance Senegalese trade. The agreement has essentially opened up the African market, simplifying procedures and reducing red tape that will spur intra-African trade. Now with the AfCFTA and the adequate infrastructure and manpower in place, Senegal is even better positioned to be an African trade hub.

Senegal is not the only country in the MSGBC region that has been scaling up investment and development within maritime logistics. Notably, Mauritania has developed efficient oil logistics at the Port de L’Amitie thanks to the Chinguetti field. Additionally, the Port of Banjul has been internationally recognized as one of the safest and most efficient ports in west Africa due to its simplified customs and administrative formalities. The country is currently improving the capacity and efficiency of the port in order to increase its competitiveness in regional markets. Other regional ports including the Port of Conakry and the Port of Bissau, both of which offer a variety of shipping and storage services. By redirecting investment towards maritime logistics, countries in the MSGBC region serve to gain from increased trade and distribution of energy products.

In response to sub-Saharan Africa’s growing demand for new oil and natural gas, and renewable energy projects, and increasing interest from international stakeholders to invest, develop, and succeed on the continent, Energy Capital & Power will hold the MSGBC Oil, Gas, & Power 2021 conference and exhibition during December 2021. Focused on enhancing regional partnerships, spurring investment and development in the oil, natural gas and power sectors, the conference will unite regional international stakeholders with African opportunities, serving as a growth-oriented platform for Africa’s energy sector.

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Charné Hollands

Charné Hollands

Charné Hollands is the Deputy Editor at Energy Capital & Power. She holds a Higher Certificate in Professional Photography and Masters in Media Studies from the University of Cape Town. Charné writes content for ECP's website and events as well as co-authored African Energy Chamber: Road to Recovery.