Arab Petroleum Pipelines Co.

Arab Petroleum Pipelines Co., commonly known as SUMED (Suez-Mediterranean Pipeline), is a significant player in the oil transportation sector, particularly within the Arab world and beyond. Established through a cooperative effort by several Arab nations, the company was founded in 1974. Its primary objective is to facilitate the transportation of crude oil from the Red Sea to the Mediterranean Sea, offering an alternative route to the Suez Canal.

Company Overview:

• Founded: 1974
• Headquarters: Alexandria, Egypt
• Shareholders: The primary shareholders are Egypt, Saudi Arabia, Kuwait, the United Arab Emirates, and Qatar, reflecting the company's strategic importance to these countries.

Core Operations:

• SUMED Pipeline: The SUMED pipeline is the company's flagship asset. It runs approximately 320 kilometers (about 200 miles) long and consists of two parallel pipelines with a capacity of about 3.1 million barrels per day. The pipeline starts at the Ain Sukhna terminal on the Red Sea and ends at the Sidi Kerir terminal on the Mediterranean coast.
• Storage Facilities: The company also maintains extensive storage facilities at both terminals, which are crucial for handling and temporarily storing large volumes of crude oil.

Strategic Importance:

• Alternative Route: The SUMED pipeline serves as a vital alternative to the Suez Canal, especially for Very Large Crude Carriers (VLCCs) that cannot pass through the canal fully loaded due to draft restrictions.
• Energy Security: By providing a reliable mode of transportation, the company enhances energy security for oil exporting and importing nations.
• Economic Impact: The pipeline generates significant transit fees and thereby plays a crucial role in the economies of its shareholder countries.

Challenges and Developments:

• Geopolitical Risk: The company operates in a region with considerable geopolitical risks that could potentially impact its operations.
• Market Dynamics: Fluctuations in global oil markets, including changes in production levels by OPEC and other oil-producing nations, affect SUMED's business.
• Technological Upgrades: Advances in technology and continuous investment in infrastructure are necessary to maintain the pipeline's efficiency and safety.

Future Prospects:

SUMED is likely to remain a critical component of global oil transportation due to its strategic location and capacity. The company may explore additional investments and partnerships to adapt to evolving market conditions and technological advancements.

In summary, Arab Petroleum Pipelines Co. (SUMED) plays a key role in the global oil supply chain by providing a strategic transit route that complements the Suez Canal, ensuring efficient and secure transportation of crude oil between the Red Sea and the Mediterranean.