The U.S. Trade and Development Agency has signed an agreement to fund a feasibility study that will help Tonga upgrade its fuel transport and storage systems. The work will be carried out for Pacific Energy South West Pacific Limited, the country’s leading fuel supplier, and focuses on preparing the infrastructure to handle larger shipments from medium-range tankers.
Tonga imports all of its fuel and currently relies on costly transshipment through third countries. Storage capacity covers only 15 to 20 days of supply. The study will examine three options for receiving medium-range tankers directly, expanding storage to roughly 60 days, preparing initial engineering designs for the preferred approach, and developing a practical model for serving the outer islands. It will also recommend regulatory changes to the fuel pricing framework that could attract more private investment.
“Reliable energy access is the foundation of a stable, growing economy,” said Thomas R. Hardy, USTDA’s Deputy Director. “This feasibility study will help chart a path toward greater fuel security for Tonga, open new export opportunities for U.S. companies, and contribute to a free and open Indo-Pacific.”
USTDA-funded projects are performed by U.S. companies. Firms interested in bidding on the pre-feasibility study can find details at ustda.gov.
The upgrades are expected to lower fuel costs and improve the nation’s ability to withstand supply disruptions. Stephane Cadel, CEO of Pacific Energy, described the project as the most significant energy sector development in Tonga in decades.
“The project we are announcing today, with USTDA, is the most significant energy sector development in the Kingdom of Tonga for decades,” Cadel said. “Pacific Energy is very pleased to be carrying out this project, which will significantly improve the security and resilience of Tonga’s long-term fuel supply. Reducing transport costs and increasing volumes will bring economies of scale and support long-term development benefits for people across the country. USTDA’s involvement has been instrumental, as it has not only brought together all stakeholders – the Government of Tonga and the private sector – but will also help to structure the financing for the operation. The recognized expertise of US companies in the field of port and energy infrastructure is well established and clearly helps to mitigate technical risks and reassure investors regarding the reliability of their investment.”
