Fiji and Tonga seek alternative fuel supply partners

Fiji and Tonga are exploring alternative fuel supply partnerships to ensure their energy security needs are met.

Fijian Foreign Affairs and External Trade Minister Sakiasi Ditoka recently visited Malaysia and Korea and held discussions with his counterparts in the two countries about possible fuel supply partnerships.

He also met with representatives of PETRONAS, Malaysia’s national oil and gas company, which is wholly owned by the Malaysian government.

The company manages Malaysia’s oil and gas resources and operates across the entire energy value chain, including exploration, production, refining, marketing, and retail fuel sales.

He also discussed fuel supply and renewable energy options while visiting Korea.

Ditoka said he had held similar discussions in Singapore as well.

Meanwhile, Tonga is also looking at fuel supply security, with the government signing a feasibility study agreement with Pacific Energy South West Pacific Limited, which is funded by the United States Trade and Development Agency (USTDA).

Prime Minister Lord Fatafehi Fakafanua signed the agreement in Nuku’alofa last week.

Ditoka said Fiji had drawn several lessons from the recent global fuel crisis, and there was a need to strengthen resilience against future disruptions to international supply chains, shipping routes and global prices.

He proposed a structured and formal arrangement between Fiji and Malaysia to Malaysia’s Minister for Investment, Trade and Industry, YB Datuk Seri Johari Abdul Ghani, in Kuala Lumpur.

The proposed ‘Fuel Security and Strategic Energy Resilience’ framework looks at cooperation on fuel supply diversification, strategic reserves and storage, supply-chain resilience, technical cooperation, energy infrastructure and the transition towards cleaner energy.

“Our experience has taught us that energy security cannot be addressed only when a crisis occurs,” Ditoka said.

“We need to build the systems, partnerships and resilience that will prepare us for the next disruption.”

In his meeting with PETRONAS executives, Ditoka highlighted Fiji’s particular vulnerability as a small island developing state dependent on imported petroleum products.

He said that disruptions to international shipping, rising freight costs and congestion can have significant consequences for Fiji and the wider Pacific.

He said they are hopeful that Fiji can be considered within PETRONAS’ existing arrangements for oil storage and stockpiling with international partner countries.

“The recent global fuel volatility and Middle East shipping disruptions have underscored that small island developing nations cannot rely solely on spot-market arrangements,” he said.

“Securing Fiji’s energy supply chain is vital not only for our 900,000 citizens but also for our maritime neighbours, who rely on Fiji as a regional hub. Partnering with a global energy leader like PETRONAS allows the Coalition Government to build true long-term resilience for Fiji and the wider Blue Pacific.”

Fiji supplies fuel to Tonga and smaller Pacific island nations like Kiribati, Nauru and Tuvalu.

Ditoka said for Fiji, the objective is ensuring that fuel supply security is guranteed before the next international crisis.

The current crisis arose as a direct result of the war between Iran and the United States of America, as Iran closed the Strait of Hormuz, the shipping passage between Iran and Oman that connects the Persian Gulf to the Gulf of Oman and the Arabian Sea.

Around 20 percent of the world’s oil trade and a significant share of liquefied natural gas (LNG) exports normally pass through the Strait of Hormuz, from major exporters such as Saudi Arabia, Iraq, Kuwait, Qatar, and the UAE.

Ditoka said he is hopeful that Fiji’s interest in being considered in Malaysia’s fuel stockpiling and supply-security arrangements being developed with Australia and New Zealand will come to reality,

He added that the work now would be left to Fijian officials following through with their Malaysian counterparts on the technical details and determine what practical arrangements may be possible.

In Korea, he said, the country’s Minister of Foreign Affairs Cho Hyun was receptive to discussions that Fiji and Korea should strengthen cooperation towards maintaining stable and resilient supply chains.

Ditoka said they were also able to discuss tapping into Korean expertise in renewable energy, battery storage, smart-grid technology and other areas that can help Fiji progressively strengthen its energy independence and resilience.

In Nuku’alofa, Lord Fakafanua said the feasibility study would help determining how Tonga’s fuel transport and storage infrastructure could be modernised.

The study would assess options to enable Tonga to receive larger medium-range fuel tankers directly, reducing the need for costly fuel transhipment through third countries and strengthening the island kingdom’s fuel supply.

The proposed way forward for Tonga would see the country’s fuel storage capacity increased from 15-20 days of supply to 60 days.

Lord Fakafanua said that would provide greater protection against international supply disruptions and volatality in fuel prices.

“This is an important investment in Tonga’s long-term energy security,” he said.

“By increasing storage capacity and improving fuel transportation infrastructure, we are protecting our people and economy from further external disruptions and putting in place infrastructure that will serve Tonga for years to come.

“Tonga welcomes partnerships that strengthen the resilience of its existing energy supply.”

Tonga currently gets it supplies via Fiji through Pacific Energy and Total, with supply tankers visiting Nuku’alofa every fortnight or in a 15-day cycle.

There were attempts in 2016-2017 for a local storage and supply depot with a bigger capacity to be constructed in Nuku’alofa, that proposal put forward by the International Bunker Supplies Limited of Australia.

That proposal also included having Medium Range Tankers (MR Tankers) servicing Tonga but it did not received government approval until 2019 by which time the company had withdrawn their interest.

MR Tankers are used to transport refined petroleum products, including Petrol (gasoline), Diesel, Jet fuel, Kerosene, Naphtha and some chemicals and biofuels.

Tonga currently gets fuel supplies through Local Coastal Tankers (LCTs) for the Fiji-to-Tonga leg of the journey, usually originating from Vuda in the West of Fiji’s main island Viti Levu.