Lonrho’s (LON:LONR) 63%-owned port operator, Luba Freeport, has agreed a significant deal with TENARIS (NYSE: TS) which will ultimately see the major oil and gas service group establish a regional hub at the Freeport in Equatorial Guinea.
“We are delighted that TENARIS is yet another world class company that has chosen Luba Freeport as a base to establish operations," Lonrho chairman David Lenigas commented.
Initially, while a bespoke 10,000m2 is being built, TENARIS will operate from a temporary facility within Luba Freeport. The 10,000m2 facility will completed by December 2010, and it will be designed to easily permit TENARIS operations to expand up to a 60,000m2 facility, to meet further contracts.
According to Lonrho, the TENARIS deal emphasises Luba Freeport as the oil industry’s “port of choice” in Equatorial Guinea. Luba Freeport's existing clients include Hess, Exxon Mobil, Noble Energy, MI Swaco, Baker Hughes, Schlumberger, CNOOC, Nalco and Marathon.
Furthermore, given TENARIS position in the tubular products market, this latest deal will enhance Luba Freeport's status as the 'one stop shop' for West African oil operations.
“Luba Freeport continues to build on the range of services based at the port, and the arrival of a leading tubular pipe supplier means that all the major services required for the industry are now available from the one location, making Luba Freeport a highly efficient port from which oil companies can operate,” Lenigas added.
TENARIS is the largest supplier of tubular products and related services, to the international oil and gas industry. Among its broad range of products and services, the company supplies casing and tubing for oil wells, and provides key components for onshore oil and gas pipelines.
Lonrho owns a 63% stake in the Luba Freeport, alongside its partner the National Oil Company of Equatorial Guinea, GEPetrol, which owns the remaining 37%. The company highlighted that the port benefits from an “ideal geographical location and a unique large deep water bay”.