Egypt's Citadel Signs Deal to Build Fuel Bunkering Terminal

Egyptian private equity firm Citadel Capital (CCAP.CI) said Tuesday its subsidiary Mashreq Petroleum has signed a 25-year concession agreement with the East Port Said Port Authority to build Egypt's first independent tank terminal.

The 3 billion Egyptian pound ($430.5 million) facility will be built on the north side of Suez Canal , Egypt 's main waterway, to serve the global shipping market and provide backup to Egypt 's national energy security policy, Citadel said in an emailed statement.

The facility will have a capacity of up to 800,000 tons of product, including fuel oil, gasoil, naphtha and jet fuel, as well as bunker fuels.

Mashreq--which does dredging, shore protection and site leveling, as well as tank farm engineering and design and marine engineering and is 24.5%-owned by Citadel--will also have an annual storage capacity of 10 million tons and bunkering capacity of 2-3 million tons per year.

The concession is based on a build-operate-transfer system for 25 years, extendable by one year for every five years that the project achieves at least 90% of its operational targets.

The Suez Canal , one of Egypt 's main sources of revenue and foreign currency, links the Mediterranean and the Gulf of Suez and is known to be the fastest route between Europe , Asia and North Africa . Because of its prime location, the 193-kilometer waterway brings in more than $5 billion every year for Egypt .