Big moves on green fuels

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What we're tracking today

TODAY: Road and infrastructure projects courtesy of Egypt and Iraq + Egypt to resume LNG exports this month

Good morning, lovely people. We wrap this busy week with another packed issue, with fresh PMI data from the UAE and a mixed bag of news spanning M&A, ports and more.

THE BIG LOGISTICS STORY- T he UAE’s non-oil business sector expanded at a fast pace in September on the back of a record increase in output and increased sales, coming in at 56.7, up from55.0 in August. Meanwhile, DP World and Indonesian conglomerate Maspion Group have kicked off construction on a new container terminal in Gresik, East Java after years of delays.

^^ We have everything on this story and more in the news well, below.

WATCH THIS SPACE #1- Egypt’s Holding Company for Roads, Bridges and Land Transportation Projects will set up a branch in Saudi Arabia to work on infrastructure projects in the kingdom, Egypt’s Transport Ministry said in a statement, without disclosing further details about the projects.

WATCH THIS SPACE #2- Iraq is launch ing four new projects to ease traffic congestion in Baghdad,Iraqi news agency INA reports. The projects involve the construction of a bridge, two tunnels, and an overpass, as well as renovating intersections and construction of a road connecting Mohamed Al Qasim Expressway to Kirkuk-Baghdad road with two lanes in each direction, according to INA.

DATA POINT #1- Qatar’s trade surplus narrowed 41.1% y-o-y in August, but saw an 8.7% m-o-m increase, according to the Planning and Statistics Authority(PSA). The total value of exported goods amounted to some QR 31.4 bn, a 32.9% y-o-y decrease, with Qatar’s biggest export markets being Japan, China, Singapore, and India.. Meanwhile, imports fell 4.8% yo-y to QR 10.1 bn, while rising 6.6% y-o-y on a monthly basis.

DATA POINT #2- T urkey’s trade deficit narrowed sharply in September due to slowed economic activity and a weaker TRY, Bloomberg quotes Turkey’s Trade Minister Omer Bolat as saying. The gap in foreign trade fell under USD 5 bn, compared to USD 9.6 bn last year. Turkey’s exports increased 0.3%, while imports fell 14.1% Bolat added. Exports have held up better despite the country’s biggest markets in Europe showing signs of falling demand, Turkish exporter TIM is cited as saying by the outlet. The weakness in the Turkish currency has also provided a boost for exporters, while driving up the prices of imports, the outlet adds.

HAPPENING TODAY-

The fourth Extraordinary Congress of the Universal PostalUnion (UPU) kicked off on Sunday in Riyadh and will run till Thursday, Saudi press agency SPA reported. Representatives from 192 countries are expected to attend the event, which is held under the co-chairmanship of the Saudi Postal Corporation, and will discuss the impact of UPU decisions on the postal and logistics sector and how to keep pace with technological developments and address challenges. It will also touch on how to build a postal system that promotes economic and social development.

A delegation of Kuwait’s Chamber of Commerce led by Mohammed Jassim Al Saqr landed in Canada earlier this week for a joint economic forum, and will stay till Thursday, Kuwait’s Al Anba reports. The forum will review avenues for cooperation and investment in several sectors including oil and gas, transportation, logistics, AI and innovation, banking and finance, among others. The Kuwaiti delegation will include several members of the chamber of commerce, representatives from government agencies and Kuwaiti companies.

MARKET WATCH-

Egypt will resume LNG exports this month after high domestic demand prevented exports in June, Oil Minister Tarek El Molla revealed to Reuters on the sidelines of the Adipec energy conference in Abu Dhabi. The country is still “arranging and preparing,” while “quantities are not yet defined,” he added. Egypt’s LNG terminals on the Mediterranean coast have the capacity to ship 12 mn tonnes a year, a number the country aims to reach by 2025.

The country is trying to position itself as a major exporter and regional energy hub by selling its own gas and re-exporting Israeli gas as LNG to the Middle East, Africa, and Europe. Egypt’s exports for this year are expected to be some 7.5 mn tonnes, with the majority to be sent to Europe and Asia, according to the outlet.

CIRCLE YOUR CALENDAR-

A Saudi-Turkish Summit is scheduled to take place in Istanbul, Turkey on 8-12 October. Organized by the Türkiye Exporters Assembly in coordination with the Turkish Commerce Ministry, the summit will be attended by Turkish exporters and 70 members of Saudi Arabia’s Riyadh Chamber of Commerce. The participants will also include representatives from an array of sectors including food, non-ferrous metals, textiles, ready-made garments, chemicals, and furniture.

The GCC-Türkiye Economic Forum is set to take place on 11-13 November in Çırağan Palace Kempinski Hotel, Istanbul, Turkey. The event will cover trade, investment and finance, energy, infrastructure, transportation and logistics, industry, tourism, agriculture and food, and sports sectors.

Shaping the Future of Shipping Summit , organized by the International Chamber of Shipping, will take place on 9 December in the UAE. The event will bring together government officials and leaders in energy, maritime, and all parts of the supply chain to discuss plans to address climate change and help transition the industry towards sustainability.

Check out our full calendar at the bottom of this email for a comprehensive listing of upcoming news events and news triggers.

UAE’s non-oil private sector grew in September amid strong demand

T he UAE’s non-oil business sector expanded at a fast pace in September on the back of a record increase in output and increased sales, coming in at 56.7, up from 55.0 in August, according to S&P Global UAE purchasing managers’ index (pdf). New orders climbed to their highest level since June 2019 on the back of increased demand, especially from foreign clients.

REMEMBER- The threshold separating contraction from growth is 50.0, with anything over 50 denoting expansion, and anything below indicating contraction.

Surveyed firms pointed to increased demand, especially from foreign clients, which helped lower prices amid competitive pressures. Business output also expanded, with growth picking up from August’s 7 month low, and was softer than recorded for new orders.

Input costs rose slightly during the month, which led to some firms raising their charges, though most reduced them to stave off competition.

Supply chains also improved with delivery times shortening to the greatest extent since July 2019. Inventories of inputs rose at its softest pace in 14 months as firms faced greater drawdown to meet new orders, leading to an increase in purchasing activity, according to the survey. Employment also rose at its softest pace in seven months, while backlogs grew at their softest pace in over two years, an indication that firms had sufficient capacity to handle the influx of new orders, senior economist at S&P David Owen commented.

Looking ahead: Confidence for business growth improved to its strongest since March 2020 for the year ahead, according to the survey.

ICYMI- Saudi Arabia and Qatar’s non-oil private sectors continued to expand in September, while Egypt’s fell further into contraction in September.

DP World + Maspion Group break ground on new container terminal in East Java

DP World + Maspion start construction on delayed East Java container terminal: DP World and Indonesian conglomerate Maspion Group have kicked off construction on a new container terminal in Gresik, East Java in a groundbreaking ceremony, according to a press release. The facility is one of several DP World is building and operating as part of a strategy to expand its global ports and logistics network.

Background: DP World and Canadian investor Caisse de dépôt et placement du Québec (CDPQ) inked a long-term agreement in mid-2021 with Maspion Group that was meant to pave the way for construction work on the terminal to begin in 3Q 2021, with initial plans to start operations early 2023, Wam reported. Investments for the project at time were estimated at USD 1.2 bn.

What happened to CDPQ? The original JV was inked between DP World, CDPQ, and Maspion, though the new statement does not mention CDPQ’s role in the JV.

Details: The terminal will have a capacity of up to 3 mn twenty-foot equivalent units (TEU), and will be operated by Maspion and DP World’s joint venture, dubbed DP World Maspion East Java, the statement adds. The JV has plans to also develop a 110 hectare integrated industrial and logistics park, with room for further expansion, in close proximity to the terminal with the aim of providing end-to-end supply chain solutions.

What they said: “Our partnership with Maspion Group to build new infrastructure in Gresik will strengthen East Java’s position as a key trade and logistics gateway,” Group Chairman and CEO of DP World Sultan Ahmed bin Sulayem said in the press release. “It will also serve as a cornerstone in our strategy to expand our global ports and logistics network to offer our customers end-to-end solutions and boost supply chain resilience,” he said.

DP World has been on an expansion spree in Asia: The logistics outfit recently signed a concession agreement valued at USD 510 mn for a new mega container terminal at Kandla in India, and later said it plans to invest INR 2.15 bn in the logistics and warehousing sector in India’s Telangana state. It will also help expand and “modernize” Indonesia’s Belawan New Container Terminal (BNCT), as part of a consortium with Indonesian sovereign wealth fund Indonesia Investment Authority(INA), which has partnered with Indonesia state-owned port operator Pelindo. The company also has a USD 7.5 bn agreement with Indonesia’s sovereign wealth fund to develop the country’s seaports over a period of 30 years.

Maersk’s green fuels arm inks USD 3 bn framework agreement with Egypt to produce green methanol

Maersk subsidiary is investing up to USD 3 to produce green fuel in the SCZone: Egypt signed a framework agreement with C2X — which is owned by AP Moller Holding and AP Moller-Maersk — worth some USD 3 bn for the production of green methanol and its derivatives in the Suez Canal Economic Zone, according to a statement. The USD 3 bn price tag is for the initial phase of the agreement, the statement noted, adding that the SCZone, Sovereign Fund of Egypt, the New and Renewable Energy Authority, and Egyptian Electricity Transmission Company inked the agreement with C2X.

The details: The company plans to produce 300k tons of green methanol per year in the project’s first phase, with that figure set to increase to 1 mn by the end of the final phase, the statement said.

REMEMBER- Danish shipping giant AP Moller-Maersk and its parent company AP Moller Holding (APMH) established C2X in September to produce and sell green methanol to the global shipping industry. The firm aims to reach an annual production output of over 3 mn tons by 2030 by pursuing large-scale green methanol projects near the Suez Canal in Egypt and the port of Huelva in Spain, among several other planned locations. The company is 20% owned by AP Moller-Maersk, with the majority 80% stake held by AP Moller Holding.

Maersk has already been laying the groundwork: The company had signed a preliminary agreement with the government during the COP27 climate summit last year to invest as much as USD 15 bn to set up clean fuel projects in Egypt. It is reportedly on course to purchase half of the government’s 545-MW Zafarana wind farm to help power green fuels production. In May, the Egyptian cabinet also approved requests by Norwegian renewables producer Scatec and Maersk to allocate a piece of land in the Gulf of Suez for a 320-MW wind farm to power their green fuel projects.

AD Ports subsidiary Noatum exits 27.9% stake in BCDS

AD Ports Group’s logistics arm Noatum has divested its 27.9% stake in Barcelona Container Depot Service Group (BCDS), according to a press release. The divestment yielded an equity value of EUR 11 mn and resulted in a one-off capital gain of EUR 10 mn, AD Ports says.

The rationale: The divestment is part of a drive by AD Ports Group to closely manage its ownership portfolio and “monetize non-core participations and investments for which there is no path for majority ownership and/or operational control,” the statement said.

This comes a day after Noatum revealed plans to buy a Spanish logistics firm: Noatum plans to acquire Madrid-based finished vehicles logistics outfit Sesé Auto Logistics for EUR 81 mn by 1Q 2024.

About BCDS: The company specializes in the storage, maintenance, repair, and cleaning services of Dry and Reefer containers as well as ISO Tanks, the release states. BCDS maintains a main hub in Barcelona and operates across six different locations in Spain.

Background: AD Ports Group closed its 100% acquisition of Noatum after receiving the regulatory greenlight from Spanish authorities in July.

KSA, Portugal ink air transport agreement + UAE, Armenia boost trade cooperation. PLUS: Qatar, Kazakhstan eye boosting trade

KSA + Portugal ink an air transport services agreement: Saudi Arabia and Portugal have signed an agreement to establish scheduled international air services that promote aviation safety and trade exchange between the two countries,according to a statement. The agreement was signed on the sidelines of the Saudi-Portuguese Joint Committee meetings.

UAE + Armenia eye boosting trade cooperation: The UAE’s Commerce and Industry Federation Chairman Abdulla Mohamed Almazrui and Armenia’s Deputy Prime Minister Tigran Khachatryan discussed developing economic cooperation during the UAE-Armenian Business Forum, Emirati news agenc y WAM reports. The two officials stressed their commitment to strengthening economic ties, particularly in trade, education, and tourism, and expressed their intention to establish practical projects that will bolster the economies of both countries.

Qatar + Kazakhstan eye boosted ties: Officials from Qatar and Kazakhstan discussed bolstering cooperation in trade, investment, construction, and infrastructure at the sixth session of the Qatar-Kazakhstan Joint Higher Committee held in Doha, Qatar, Qatar News Agency (QNA) reported. Qatar’s Commerce and Industry Minister Sheikh Mohammed bin Hamad bin Qassim Al Thani also showcased avenues for investment in Qatar and called on Kazakhstani investors to avail of the opportunities, the report also said.

Adnoc is working on a battery storage system, while its subsidiary decarbonizes its heavy vehicle fleet. PLUS: More from Flynas, IHC, Menzies, and Yanbus

TRUCKING-

Adnoc Distribution will power its UAE heavy vehicle fleet with B20 biodiesel, targeting a 15% reduction in CO2 emissions by the fleet, according to a press release. The fleet plays a critical role in delivering fuels and liquified petroleum gas (LPG) to Adnoc customers, and the move is in line with efforts by the firm to step up its decarbonization plans, the statement said. “We are delivering on our commitment to using biofuel to power our fleet and help reduce our carbon intensity by 25% by 2030,” CEO of Adnoc Distribution Bader Saeed Al Lamki said in statements cited by the press release.

ALSO FROM ADNOC- A dnoc will use a battery storage system of repurposed EVs batteries to decarbonize remote operations: Adnoc is partnering up with German consulting and engineering startup Power ID to deploy repurposed EV batteries to reduce reliance on diesel generators in powering remote drilling rigs, according to a press release. The system will be built in the UAE and will be able to hold up to 2 MW of power within a single 20 foot storage container. Each container will be mobile, allowing for deployment at remote sites. The system will allow for the use of EV batteries that would have otherwise been disposed of.

The battery energy storage system will cut the carbon emissions of remote drilling rigs by up to 25% and reduce their energy expenditure by 50%, according to the release.

AVIATION-

Saudi low cost carrier Flynas took delivery of five Airbus A230s in the past month, expanding its all-Airbus fleet to 56 aircraft, according to a press release. The airline has so far received 11 aircraft this year, and eight new planes are scheduled for delivery over the next few weeks, according to the press release. This is part of “an order of purchasing 120 aircraft from Airbus in a total amount exceeding SAR 32 bn,” Flynas CEO Bander Al Mohanna said. The expansion of the carrier's fleet “will enable us to increase our expansion plans in the current year through the launch of new domestic and international destinations,” Al Mohanna added.

M&A WATCH-

Abu Dhabi’s International Holding Company (IHC) has upped its stake in India’s Adani Enterprises (AEL) to over 5%, according to a Abu Dhabi Securities Exchange (ADX) disclosure (pdf). The IHC said it believes in “the inherent strength of airports, data centers, green hydrogen, and various other verticals being incubated under AEL and that AEL is poised to uniquely capitalize on India’s robust growth journey.” This follows a move by IHC to sell its investments in Adani Green Energy and Adani Transmission as part of its strategy to rebalance its portfolio, according to separate ADX disclosure (pdf). The IHC’s increased stake in AEL is a “ringing endorsement of the group's robust capex plans, governance, and transparency,” Reuters quoted Adani Group as saying.

ALSO WORTH KNOWING-

Kuwaiti Agility’s Menzies Aviation has signed an MoU with Air Serbia to establish a joint venture to provide passenger and ramp services at Belgrade Nikola Tesla Airport starting February 2024. (Statement)
A German-Omani business forum held by the Oman Chamber of Commerce discussed cooperation in transportation and logistics, with officials stressing the need for exchanging trade delegations to exchange knowledge and facilitate imports and exports between the two countries. (Oman News Agency)
S audi Ports Authority’s King Fahd Industrial port in Yanbu exported its first shipment of asp halt - bitumen to Saudi Arabia’s Aramco Luberef base oil company, following a 20-year hiatus.(Statement)

UK’s export credit agency in talks to finance its third railway project in Turkey

The UK’s export credit agency, UK Export Finance (UKEF) , is in talks to finance a third railway project in Turkey, Al Monitor reported. The agency handed out in March a EUR 2.1 bn loan for a high speed railway connecting Ankara with the coastal city of Izmir, and later underwrote EUR 781 mn in financing for a 286 km high speed railway in southern Turkey. Talks on a third railway project are reportedly ongoing as the UK negotiates a rebooted trade agreement with Turkey, the country’s second-largest trade partner, Al Monitor said.

Calendar

OCTOBER

Egypt’s Suez Canal Economic Zone (SCZone) goes on a roadshow to South Korea.

1-5 October (Sunday-Thursday): Kuwaiti delegation led by Chairman of the Kuwait Chamber of Commerce Mohammed Jassim Al Saqr heads to Canada for a joint economic forum.

3-5 October (Tuesday-Thursday): Fruit Attraction, Madrid, Spain.

8-10 October (Sunday-Tuesday): Saudi-Turkish Trade Summit, Istanbul, Turkey.

9-15 October (Monday-Sunday): 2023 World Bank Group - IMF Annual Meetings, Marrakech, Morocco.

10-12 October (Tuesday-Thursday): Autonomous E-mobility Forum, Doha, Qatar.

10-12 October (Tuesday-Thursday): Intermodal Europe 2023, RAI Amsterdam, Netherlands.

10-12 October (Tuesday-Thursday): Cool Logistics Global 2023, Genoa Stock Exchange, Genoa, Italy.

16-17 October (Monday-Tuesday): Duqm Economic Forum, Crowne Plaza, Duqm, Oman.

24-25 October (Tuesday-Wednesday): Future Fuels Europe, Amsterdam, Netherlands.

26-29 October (Thursday-Sunday): ICASM 2023, Conrad, Etihad Towers, Abu Dhabi, UAE.

30 Oct-2 Nov (Monday-Thursday): XLP AGM 2023, Barcelona, Spain.

30-31 October (Monday-Tuesday): Gartner Supply Chain Planning Summit, London, UK.

31 Oct-2 Nov (Tuesday-Thursday): IAPH World Ports Conference, Abu Dhabi, UAE.

September-November: Emirates Postal Group’s “Logistics Unleashed” competition, UAE.

NOVEMBER

November: Abu Dhabi Airports Terminal A set to become operational.

1 November (Wednesday): Smart Maritime Network Dubai Conference, Conrad Dubai, UAE.

11-13 November (Saturday-Monday): GCC-Türkiye Economic Forum, Çırağan Palace Kempinski Hotel, Istanbul, Turkey.

9-15 November (Thursday-Wednesday): Intra-African Trade Fair, Cairo, Egypt.

15-17 November (Wednesday-Friday): Global Freight Summit 2023, Coca Cola Arena, Dubai, UAE.

13-17 November (Monday-Friday): Dubai Airshow, Dubai World Center, UAE.

14-15 November (Tuesday-Wednesday): Supply Chain & Logistics Arabia, Narcissus, Riyadh, Saudi Arabia.

14-17 November (Tuesday-Friday): IATA Slot Conference, Dubai World Trade Centre, Dubai, UAE.

15 November (Wednesday): Leaders in Logistics UAE Summit, Dubai, UAE.

21-23 November (Tuesday-Thursday): Intermobility Expo 2023, Dubai World Trade Center, Dubai, UAE.

21-23 November (Tuesday-Thursday): Touchdown Middle East, Gulf Hotel, Bahrain.

21-23 November (Tuesday-Thursday): ARABAL 2023 Conference, Hilton Riyadh Hotel & Residences, Riyadh, Saudi Arabia.

23 November (Thursday): Global Supply Chain and Logistics Summit, Grand Millennium Hotel Business Bay, Dubai, UAE.

30 November-3 December (Saturday-Tuesday): Handling Expo, Egypt International Exhibition Center, Cairo, Egypt.

September-November: Emirates Postal Group’s “Logistics Unleashed” competition, UAE.

DECEMBER

10-11 December (Tuesday-Wednesday): Invest in Logistics, St.Regis Almasa Hotel, New Administrative Capital, Egypt.

EVENTS WITH NO SET DATE

2H 2023:Construction of Neom’s first hydrogen fueling station will kick off.

2H 2023: Expansion of Baghdad International Airport to begin.

3Q 2023: Design and supervision contract for Oman’s proposed Musandam Airport to be awarded.

Before the end of the year: The first phase of the Ain Sokhna port redevelopment will wrap.

2024

1Q 2024: Construction of phase 3 of Agility’s logistic park in Abidjan, Côte d'Ivoire to be completed.

1Q 2024: Egypt’s Transport Ministry to launch pre-qualification tender for Cairo-Alex freight railway.

1H 2024: Civil Construction subcontracts for construction firms in Oman for implementation of the Abu Dhabi - Suhar rail link to be announced.

King Salman Energy Park is set to become operational in 2024

FEBRUARY 2024

13th World Trade Organization Ministerial Conference, Abu Dhabi, UAE.

12-13 February (Monday-Tuesday): Breakbulk Middle East conference, Dubai Trade Centre, UAE.

12-15 February (Monday-Thursday): African Air Expo, Cape Town, South Africa.

28 February-1 March (Wednesday-Friday): MENA Transport Congress and Exhibition 2024, Dubai, UAE.

MARCH 2024

5-6 March (Tuesday-Wednesday): MRO Middle East, Dubai Trade Center, Dubai, UAE.

12-14 March (Tuesday- Thursday): IATA World Cargo Symposium, Hong Kong International Airport, Hong Kong.

20 March (Wednesday): Construction work scheduled to begin on the 162 km Rasht-Astara Railway in Iran.

MAY 2024

2-3 May (Thursday-Friday): Geneva Dry, Hotel President Wilson, Geneva, Switzerland.

21-23 May (Tuesday-Thursday): WAGA 2024, Riyadh, Saudi Arabia.

JUNE 2024

19-21 June (Wednesday-Friday): World Freezones Organization’s Annual International Conference and Exhibition, Bari, Italy.

NOVEMBER 2024

13-15 November (Wednesday-Friday): The Bahrain International Airshow, Sakhir Airbase, Bahrain.

DECEMBER 2024

10-12 December (Tuesday-Thursday): Middle East Business Aviation, DWC, Dubai, UAE.

2025

Mid-2025: Iraq will complete phase one of the construction of the Grand Faw Port.

DHL and Aramco’s logistics and procurement hub in Saudi Arabia will commence operations.

1Q 2025: Sadr Park’s Logistics Center in Riyadh to be completed.

2027

4Q 2027: Oman’s Musandam Airport construction to be completed.

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