Aramex and DB Schenker sign a Strategic MoU to accelerate their expansion ambitions in Abu Dhabi and the MEA region
News, Jul 14, 2021
Aramex (DFM: ARMX), a leading global provider of comprehensive logistics and transportation solutions, and Germany-based DB Schenker, a global leader in supply chain management and logistics solutions, today announced the signing of a strategic Memorandum of Understanding (MoU) …
Orchestrating the logistics for breakbulk cargo is challenging yet rewarding work. Whether the freight is being transported in crates, drums, barrels, boxes or as standalone equipment (e.g., steel girders, vehicles, etc.), breakbulk must be managed individually—a labor intensive undertaking that comparatively requires more expertise to move the cargo safely and in a compliant manner, heavy-duty cranes, coordination and resources than most other freight types.
Currently, In the Middle East and Africa (MEA), demand is slowly spinning up for more breakbulk freight and logistics as numerous energy projects get underway. With some plans delayed due to the global Covid-19 pandemic and geopolitical peculiarities, the recent, renewed interest in either starting or restarting large energy projects is encouraging.
“In the MEA region, that’s well known for its rich oil and gas resources, we’re seeing more opportunities that will involve breakbulk freight in 2022 and 2023,” said Rafael Vicens, DB Schenker’s Head of Global Projects & Industry Solutions in MEA and a panel speaker at the upcoming Breakbulk Middle East conference. DB Schenker is exhibiting at the event, which takes place February 1-2 2022.
Reflecting on 2021, Vicens said that during the second half of the year, governments in the region began anticipating the conclusion of the global pandemic and the potential for positive stock market growth. In response, the administration started to inject funds into various countries to develop new projects in the region.
Some of the key focuses include renewable energy projects; however, presently, the oil and gas sector serves as the "bread and butter" of MEA. “
The future is promising for renewables. More and more progress is being made with governments announcing various new capital projects and expansions to reinvigorate the economy,”
said Vicens, "But we still need to have our feet on the ground." These activities indicated a potential boom in activity in 2022, but the emergence of the Omicron variant tampered those plans at least temporarily. Now, authorities are holding back and waiting to see how the first quarter of 2022 plays out before making any big moves.
“It could be that 2022 is more of a transitional year, similar to 2021,” Vicens concluded. “If all goes well, we should see more projects announced in Saudi Arabia and the United Arab Emirates (UAE), followed by a boom in activity in 2023.”
Oil & Gas Project Details
Some of the major MEA oil and gas projects announced in 2021 and currently underway include North Field expansion (NFE) in Qatar, the Marjan and Jafurah field in Saudi Arabia, the expansion of the Borouge plan in Abu Dhabi, and Siemens Mobility’s high-speed train project in Egypt. In Iraq, the push is on to ease the country’s energy dependency—mainly electricity—on Iran and other countries, with GE and Siemens both involved in projects there.
In Africa, TotalEnergies paused its new liquefied natural gas (LNG) project in Mozambique in 2021 while African armies worked to help quell an insurgency. The project is under the force majeure clause till March 2022 but there are good expectations that the project will resume. Also, in Mozambique, the LNG Romuva project is on hold until the TotalEnergies project finalizes and is now expected to continue sometime in 2024 or 2025.
South Africa is currently home to several new mining developments as more organizations target the country for further mineral and commodity exploration. In Angola, for example, DB Schenker recently received a new inquiry for one large oil producer’s maintenance repair and operations (MRO). Further north in Egypt, the focus is on mobility with longer-term interest in renewables also emerging.
“We’re also seeing continued oil and gas developments in Tunisia and Algeria, the latter of which is a key player in the oil and gas industry,” said Vicens. “Currently, there are a few developments, but we think this situation will improve by 2023, with countries like Nigeria, Senegal and Mauritania all seeing new oil and gas projects and expansions.”
The momentum is already moving in this direction, with Saudi Arabia just finishing the 150-unit Dumat Al-Jandal onshore wind farm development. Developers are currently bidding on phase II of this project, which is Saudi Arabia's first utility-scale wind power that will be double its current size.
TotalEnergies is investing about $27 billion in the production and exploration of the energy sector in Iraq, where the company made an initial investment of $10 billion. The contract covers four projects over 25 years, one of which will focus on the transport and injection of seawater from the Gulf to oilfields, where it can be used to extract oil.
Vicens said that wind offshore plans are progressing well in South Africa and that a new farm is currently underway in Egypt and several solar and hydropower plants are being built in Kenya.
In Saudi Arabia, the government wants to diversify the country’s economy, which is currently above 90% dependent on oil and gas. “The KSA government is developing various projects that are primarily focused on boosting tourism with new resorts, hotels and other amenities,” said Vicens.
A Fresh Approach to the Breakbulk Industry
As the current and future energy projects in MEA continue to make progress, the need for breakbulk freight logistics will increase exponentially. For example, a single wind turbine requires a large generator plus blades where each blade can be as long as 75 meters. To move the turbines, companies need special equipment, extendable trailers and breakbulk ocean vessels both roadside and seaside.
DB Schenker’s Global Projects (which supports the construction/CAPEX phase) and Industry Solutions (OPEX for oil and gas MRO, to keep an operation active, repair it, or bring in spare parts to operate that facility) support the full lifecycle of a new energy facility – that typically ranges between 25 to 50 years. When the lifecycle is complete, the infrastructure is either shut down, refurbished and/or dismantled.
“We take care of the facilities across all three stages,” said Vicens, whose team is currently providing the breakbulk logistics and full lifecycle services for the Marjan oilfield project in Saudi Arabia, which is in its starting stages. In the Kingdom, DB Schenker is also working on a project that includes the management of breakbulk vessels bringing commodities and materials from China to Oman, which are used by a plastics factory to manufacture its products.
“We’re taking a fresh approach to the industry and always looking for ways to provide new solutions and meet our customers’ requirements,” Vicens added. “At DB Schenker, we have a team that likes to look outside of the box, uncover our customers’ pain points, and then find the most viable solutions to those issues.”
DB Schenker will be exhibiting at Breakbulk Middle East February 1-2, 2022. Located in Dubai, Breakbulk Middle East is expected to attract more than 1,700 companies representing the full industrial supply chain from over 70 countries.