Singapore: Middle East oil storage operator Horizon Terminals will expand its Singapore facility by 250,000 cubic metres by year end as it sees strong demand, the head of its largest shareholder said yesterday.

This Phase 3 of Horizon’s construction will bring its capacity to 1.2 million cubic metres and the city state’s total to 7.5 million cubic metres, part of a flurry of projects to capitalise on growing fuel oil trade in Asia’s top bunkering port.

However, troubled Mitsui Oil Asia (MOA) has terminated its lease agreement. MOA had been due to start occupying the 130,000 cubic metres of tank space in stages from next month, as the main tenant under Phase 2.

Asked about the termination, Hussain Sultan, also group chief executive of Emirates National Oil Company (Enoc), said he was not concerned.

“I’m not worried at all. There are hundreds of people queueing for the tanks. There are many, many people waiting and many requests from customers for more space,” he said.

Major players such as Vitol, as well as Russian major Lukoil – which currently does not have landed storage facilities in Singapore – are on the lookout for tankage.

MOA is the Singapore-based unit of Mitsui & Co, Japan’s second-largest trading house, which recently announced losses amounting to $81 million from naphtha trading.

A Mitsui spokesman said: “We are still negotiating the contract. We are committed to existing contracts and do not intend to cut off any contracts all of sudden.

“There is a possibility that Mitsui & Co will take over the (tank) contract. MOA has withdrawn from all naphtha trading, including physical trade, but it is still handling fuel oil and crude.”