PetroTrans negotiates to extend Somaliland port

By Mark Anderson

HARGEISA (Reuters) - PetroTrans, a Chinese oil and gas producer could conclude preliminary negotiations with Somaliland for the extension of the key port of Berbera by the end of this year, but has scrapped plans to build a liquefied natural gas facility.

Philip Hirschler, a legal adviser for PetroTrans, said from London the firm planned to extend Berbera port's container and mineral export services following an agreement it signed with the government of the breakaway enclave of Somalia last August.

The Horn of Africa has been attracting increased investments in exploration by foreign oil firms, due to its proximity to east Africa, where oil has been discovered in Uganda and natural gas found in Tanzania.

The Hong Kong based company had planned to build gas pipelines from the field and at least two trains and LNG tankers for possible export of the product.

"Some of the project that was initially proposed such as the LNG facility, could not go into Berbera because it would be impossible to get any insurance on the facility," Hirschler said.

"We're still talking about (developing) a container port, a dry cargo port, and a mineral export port, once there's sufficient minerals development in Ethiopia or further west."

Ali Omer Mohamed, General Manager of Berbera port, told Reuters he expected the completion of preliminary negotiations with PetroTrans on Berbera's extension by the end of this year.

"I expect studies, contracts and agreements to be finished this year," Mohamed said.