Dubai-based Emirates National Oil Company (Enoc) is looking to East Africa to expand its storage business, according to the managing director of its oil storage subsidiary Horizon Terminals.

“We do have plans to expand. Djibouti is an area we would like to focus on as there’s a lot of focus on East Africa,” said Yusr Hussain Sultan al-Junaidy.

“For us right now, it all depends on market conditions with Saudi Arabia. There’s a lot of product coming out and growing expansion, and that will be led by the market.”

Al-Junaidy was speaking with MEED during a site visit to the Vopak Horizon independent storage terminal in Fujairah.

Jointly owned by Dutch independent tank storage firm Royal Vopak, Enoc as well as Kuwait-based Independent Petroleum Group, the terminal’s seventh phase of expansion was commissioned last year, adding 478,000 cubic metres of oil storage capacity. This raises the total capacity to 2.6 million cubic metres.

The decline in oil prices has necessitated flexibility in negotiating for contracts with clients, added al-Junaidy.

With production cuts undertaken by Gulf producers in compliance with Opec expected to boost prices in the short term, prospects for business appear sound.

“In general, demand increases for storage with an increase in oil price,” said Cees de Greve, general manager at Vopak Horizon Fujairah. ”If the forecast is that crude prices will be going up, which the traders refer to as contango, there will be some spot, short-term demand for storage and that’s what we tend to see, but then again that’s not the market we’re going after.

“We’re after customers that have a long-term view, stable needs and long-term commitments with other customers down the supply chain.”

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