Hess would offer the clean products storage capacity when tank leases expire. Existing tenants have the option to renew the contracts, while Hess reserves the option to secure the highest possible tank rates in the open market.   Hess is offering 250,000-500,000 bbl of storage tank space for gasoline or distillates at First Reserve terminal in Perth Amboy, N.J.    
Hess is also offering 250,000 bbl of gasoline/distillate tank space at Port Reading, N.J., and another 320,000 bbl for distillates at Roseton, N.Y.   At Baltimore, Md., Hess has 300,000 bbl of distillate tank space on offer.   
Meanwhile, the clean products storage tank market is facing sluggish demand as major gasoline arbitrage players continue to optimize and downsize their storage tank capacity due to unfavorable arbitrage economics.   
Trading companies are seen reducing capacities of their products storage tanks that they lease from terminal operators on the U.S. West Coast, U.S. Gulf Coast and New York Harbor in an effort to cut losses due to low tank utilization so far this year.   As a result of reduced tank demand, clean product tanks have fallen significantly from a peak seen only a few years ago in 2007.   
Several major arbitrage players have sublet their storage tanks at a significantly lower rate of about 78-80cts/bbl in the New York Harbor, sharply lower than the market rate of about $1.00-$1.20/bbl last year and a high of more than $1.60/bbl in 2007.    
“No one will pay more than 90cts/bbl for tanks in the harbor for new or sublet leases right now,” a market source said.   
In the past few months, Glencore, Cargill and Morgan Stanley have slashed storage tank space in the New York Harbor, with Reliance, RWE, Statoil and ENI seen picking additional capacity.   
These players could blend gasoline in those newly acquired tanks when the opportunity knocks or they could switch to distillates storage.