Oil trading on a global scale is a complex task when you are dealing with 5 million barrels of crude oil products every day. Swiss based oil trading company, Vitol, which has been specialising in the transacting, storing and transporting of oil for the best part of 50 years operates various fuel storage terminals around the world as part of its larger remit of providing energy and energy solutions to customers that are as diverse as electricity companies and airlines.

On the back of a recent announcement for a major oil import and distribution terminal in Cyprus worth US$129 million, Oil & Gas Middle East joined Vitol’s Dubai based managing director Christopher Bake on a site visit to its strategically important Fujairah fuel storage and refining facility to discuss the site’s growth plans and the importance of crude oil pricing to the oil and gas industry.

Vitol which owns 90% of the Fujairah Refining Company Ltd (FRCL) site – through its storage terminal arm Vitol Tank Terminals International (VTTI) – with the balance 10% owned by the government of Fujairah, first bought the facility in 2007 after it was mothballed in 2003 and operated as an oil terminal in the interim period.

With the port of Fujairah literally next door and around 200 ships anchored offshore at any given time, Vitol’s FRCL facility is ideally positioned to handle crude oil and products coming in and leaving the region. Bake says that from the outset the
concept was to take over the facility, overhaul and expand it from its initial 460 000 cubic metre storage capacity to 1.2 million cubic metres over the past two years with further land to expand upon.

“Fujairah is probably the largest independent terminal catering to one user in the region,” claims Bake. “Fujairah, logistically over the last 10-15 years has changed dramatically, it’s the third largest bunkering port in the world and with the existing terminals and the advent of some other independents it is going to become a world scale crude oil and oil product storage hub,” he explains.

He says that the Fujairah facility will cater to regional supply allowing the company to run the refinery and add value to products that it can buy and sell in the region and believes that the growth of Fujairah as a major logistics and trading hub will spur growth in other related areas.

“You have Fujairah that grows as a natural port for a staging post to vessels calling into the Gulf, on the back of that a marine industry grows, on the back of that a large bunkering business grows. The bunkering business today in Fujairah makes it the third largest bunkering port in the world.”

As the refinery is currently being expanded, the company has further plans to increase crude storage.

“Right now we’re running some crude blends, condensates and heavy crudes and we’re just looking to give ourselves a little bit more flexibility by putting some incremental refining capacity on line in the next 12 months,” says Bake.

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