St Louis, Mimshach partner to establish fuel tank farm

St Louis Petroleum has entered into an agreement with Mimshach Energy Limited, a leading indigenously owned Bulk Oil Distribution Company, to construct and utilize a large capacity fuel tank farm, to be located at Ahuatumado, Discove, in the Western Region.

The fuel tank farm will have the capacity to store up to 54, OOO cubic metres of petroleum products at a time, making it one of the biggest fuel tank farms in Ghana. The agreement demonstrates the potential of St Louis Petroleum to dramatically enhance the petroleum product supply chain capacities of operators in Ghana’s downstream oil and gas industry by providing them with crucial storage facilities that are beyond their own capacities to procure.

The partnership between the two companies will enable Mimshach store the petroleum products it imports for sale to oil marketing companies who retail the products to the general public and an array of other bulk purchase customer companies, and thus the fuel tank farm will form a key part of the petroleum product supply chain.

Importantly, the construction of a fuel tank farm under the agreement will complete Mimshach’s own supply chain since it already owns an oil marketing company itself, Sephem Oil Company. Thus ownership of a fuel tank farm will position Mimshach and its OMC subsidiary as a complete, self contained supply chain from bulk importation right through to retail sales to the final consumer.

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While the Government of Ghana, through its downstream oil and gas industry regulator, the National Petroleum Authority, is deliberately supporting local content and participation in the industry, the lack of sufficient storage capacity in the form of fuel tank farms is proving to be a major constraining factor. Fuel tank farms, while crucial in the product supply chain, are prohibitively costly to construct and thus storage capacity has been grossly insufficient.

Indeed St Louis Petroleum itself, which is part of the wider St Louis Group, was established to, among other activities, create storage capacity for the industry through its own state of the art fuel tank farms and partnerships with BDCs such as the landmark one now being entered into with Mimshach Energy.  Instructively, St Louis is already constructing its own fuel tank farm in the same vicinity, which will have a capacity to store some 64,OOO cubic metres of petroleum products, which will make it the largest single tank farm in West Africa. That tank farm will lease out storage capacity to supply chain operators and other bulk users of petroleum products.

Isaac Kofi Lutterodt, Group Chairman of the Mimshach Energy Group, said upon reaching the agreement with St Louis Petroleum: “We are aware that the provision of a fuel tank farm is crucial for any BDC. St Louis Petroleum’s choice to partner Mimshach Energy in this regard is welcome news which we wholeheartedly embrace. Mimshach Energy is certain this strategic partnership will be mutually beneficial to our respective companies.”

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Mimshach Energy was licensed by the NPA as a BDC in 2O15 and imports and supplies in bulk, diesel, gasoline, LPG, kerosene and aviation fuel. It supplies oil exploration and production companies, construction and logistics companies and OMCs including its own subsidiary, Sephem Oil Company.

The impending fuel tank farm will also be of crucial benefit to Sephem Oil Company too.

Sephem Oil currently has over 63 retail petrol stations spread across the Greater Accra Western, Central, Ashanti, Eastern and Brong Ahafo regions, with several more now under construction. It is rated among the top five OMCs in Ghana with regards to retail sales of Diesel with a market share of about 8%.

Expectedly, the new agreement will showcase St Louis’s capabilities to other supply chain operators who will consequently use it to enhance their own supply capacities for the ultimate benefit of their customers.

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