Tunisia: US$ 150 Million Loan for Oil and Gas Field Development Project
Tunis, 22 October 2008 – The African Development Bank Group (AfDB), through its Private Sector Window, has approved the provision of a senior loan of US$ 150 million to finance the Hasdrubal Oil and Gas Field Development Project, located in the Gulf of Gabes, in Tunisia.
The Hasdrubal project approved on Wednesday in Tunis, involves the construction of a standalone, concurrent gas, condensate, and oil system in the Gulf of Gabes in 62-meter water depth, approximately 100 km from the coast. Exploitation of the Hasdrubal field has only recently become viable due to prevailing high oil prices and improved estimates of available reserves.
The project will include the following components: i) Six offshore horizontal development wells for commercial production ("First Gas") and drilling of additional wells for gas and oil ("Project Completion"); ii) a wellhead platform (the "Offshore Platform") for production from offshore wells; iii) a 100 km, 18-inch diameter, sub-sea pipeline to transmit co-mingled production stream from the wellhead platform to the onshore processing plant (the "Multi-Phase Pipeline"); iv) a 16-km pipeline from the Onshore Terminal to the Ben Sahloun delivery point ; v) LPG facilities consisting of LPG processing facilities at the Onshore Terminal, LPG storage tanks at Gabes, and iv) two separate LPG pipelines for butane and propane (collectively, the "LPG Facilities").
The Hasdrubal project has been described as a timely priority by the Tunisian Government and is well aligned with the Bank’s Country Strategy Paper for Tunisia. It will help satisfy the growing national demand for gas and the projected supply gap that currently places increasing strain on foreign exchange reserves through imported energy products.
The project will have a positive contribution to Tunisia’s trade balance through the generation of foreign exchange and savings from import substitution.
This project is also in line with the Bank’s Private Sector Operations (PSO) Priorities which emphasize the development of infrastructure and natural resources as a catalyst for sustainable economic growth. In addition to being closely aligned with the Bank’s assistance strategy for Tunisia, the Hasdrubal project will provide good sectoral diversification and a significant learning opportunity in a relatively low-risk environment; all of which are consistent with the private sector strategy for middle-income countries.
During the drilling and construction phases, the project will create 1,200 local jobs. In addition to these direct economic benefits, the project is expected to have a substantial incremental impact by enhancing Tunisia’s competitive physical infrastructure.
The public-private partnership (PPP) financing structure is a first for Tunisia in the infrastructure sector and should help develop future project finance transactions in the country.