Marshall Islands : Energy Security Project

Energy / Energy utility services

MEC operates a large diesel tank farm on Majuro. This tank farm comprises eight 750,000-gallon above-ground steel tanks and two smaller intermediate tanks for short-term storage during fuel transfers. The tank farm was designed to receive bulk diesel fuel delivery by ship for supply to the MEC power generation facilities located in immediate proximity to the tank farm, and to bunker fuel for delivery to commercial marine fleets (fishing) and other power generation facilities within the Marshall Islands (the largest of which is the Kwajalein Atoll Joint Utilities Resources company operating in Ebeye). The MEC tank farm's integrity and sustainability of operation is crucial for continued energy security in the Marshall Islands. Additionally, sales to commercial marine fleets is a significant source of revenue for MEC, which helps support its other operations (power generation and sales).

The MEC tank farm was commissioned in 1981 and appears to have been designed and soundly constructed in compliance with applicable codes and standards. However, its current condition is very poor, a consequence of many years of inadequate maintenance in a harsh marine corrosive environment subject to atmospheric salt spray from all directions. All tanks and piping show significant signs of corrosion. The concrete bunding also exhibits deterioration, and there is significant erosion of concrete flooring under tanks, exacerbating corrosion and causing stress on the steel tanks' welding joints. Critical safety and security features, such as ladders, bannisters, and basic lighting have also deteriorated or are entirely absent.

The risk of catastrophic failure of tanks and associated facilities (pumping equipment, piping, containment bunding, etc.) is significant. Such failure would be likely to result in an acute and perhaps prolonged shortage of fuel for power generation, significant environmental damage, and extraordinary high costs for remediation and interim alternative supply of fuel, as well as loss of revenue for MEC from fuel sales to commercial marine fleets.

MEC and the RMI Government have requested ADB support for rehabilitation of the tank farm so bolster RMI's energy security and mitigate risks associated with potential catastrophic failure at this facility.

The tank farm's condition was assessed under World Bank technical assistance in 2011. In 2014, with the intention of commencing partial rehabilitation on three of the tank farm's ten tanks (tanks 3, 6, and 9), MEC commissioned an updated technical assessment of the three subject tanks and prepared tender documents for works based on the assessment findings. For lack of funding, MEC was unable to proceed with the intended work, and has since only been able to perform urgent repairs to allow continued operation of the facility.

The proposed RMI energy security project (RMI ESP) will restore the MEC fuel tank farm to acceptable condition for sustained operation in compliance with applicable norms and standards for safety and reliability.

Energy security for the Marshall Islands improved (National Energy Policy and Energy Action Plan)

Safety and environmental risks associated with handling and storage of refined petroleum products reduced (National Energy Policy and Energy Action Plan)

Safe and reliable operation of the fuel tank farm sustained and supply of fuel to power generation facilities throughout the Marshall Islands continued.

The contract for the Tank Farm package was signed in December 2021. This is in an advanced stage of design. Deployment and shipping of materials on the first three tanks is expected in 2022.

The sea wall contract package was awarded in February 2021. Design work is completed.

The PIC and PMU is in place to support MEC.

Majuro tank farm rehabilitated

Majuro tank farm O&M program instituted