Lonrho expansion plans for Luba Freeport.

Lonrho Africa has announced that Luba Freeport Ltd (Luba), Lonrho Africa's 63% owned subsidiary, has appointed Jurong Primewide Pte Ltd (Jurong) to plan and design the expansion of its port facilities in Equatorial Guinea.

Jurong is wholly-owned by JTC Corp, a statutory board that has been responsible for shaping the industrial landscape of Singapore since 1968. Based on extensive practical experience of planning, constructing and developing port facilities, Jurong is able to offer fully integrated design and construction consulting services.

Luba Freeport is being established as a 'one-stop-shop' for oil logistics in one of the fastest growing, oil-producing areas in the world."

Jurong will provide long-term development plans for Luba's expansion in addition to a fully integrated, short-term expansion feasibility study for immediate implementation. Following completion of the feasibility study, Jurong will commence construction of the facilities through an engineering, planning and construction contract.

The port is being developed to service the growing needs of the burgeoning oil industry in both Equatorial Guinea and in the surrounding Gulf of Guinea. In addition to its Freeport status and strategic geographic location, Luba benefits from naturally occurring deep water conditions and can handle both oil field supply vessels and ocean-going ships as a result of the minimum 10 metres water depth at the jetty. As part of the expansion however, Luba will push the jetty and facilities out towards the sea to give up to 18 metres of draft which will facilitate the servicing of the largest oceangoing vessels.

This will help to establish Luba as a regional hub for the West Coast of Africa. Cargoes in transit can be stored indefinitely and then re-shipped when necessary, without any duty being charged. Larger and costly ocean going vessels can make one stop to drop off their entire cargo at Luba rather than making partial deliveries in numerous ports. Cargo is then stored safely until it is delivered later to other regional destinations by smaller, more economic vessels.

Luba Freeport is being established as a 'one-stop-shop' for oil logistics in one of the fastest growing, oil-producing areas in the world," said David Lenigas, joint chairman and CEO of Lonrho Africa. "Jurong is the world leader in the design, engineering, construction and operation of port facilities. With the combination of our vision for the port and Jurong's expertise, we believe that, from shipping's perspective, Luba can become to Africa what Singapore is to Asia."

Luba has commenced discussions with a number of potential funding counterparties to fund its expansion plans for the port. These are taking place concurrently with the technical feasibility study to ensure that expansion plans are implemented in the shortest possible time frame.

In May, Lonrho Africa announced its acquisition of 63% of the issued share capital of Luba Freeport for $2m. The port has a reputation within the West African region as an efficient and cost effective freeport. It acts as a logistics centre for the oil and gas industries in the Gulf of Guinea and services major oil companies in the region. Its tax free status and central geographical location make it a unique choice for a West African regional hub.

Lonrho Africa has agreed with the Equatorial Guinea government to maintain the overall development programme for Luba Freeport facilities. Luba Freeport's major contracted clients include: Amerada Hess, Mobil Equatorial Guinea, Baker Hughes, Marathon, LOTEG, Schlumberger, Nalco, SBM, Chevron Texaco, Devon Energy, Petronas, Noble Energy and MI Equatorial Guinea.

Lonrho Africa is in the process of reestablishing a significant presence on the African Continent. The new investment and acquisition strategy, adopted following the appointment of David Lenigas as CEO in December 2005, will focus on the natural resources, infrastructure, leisure and agribusiness sectors. Lonrho Africa has considerable experience across these industriesin a wide range of countries. Recently, the company announced investments in Brinkley Mining Plc, Nare Diamonds Ltd and Luba Freeport Ltd in Equatorial Guinea.