May 21, 2012 [Reuters] - Oil storage capacity outside the Strait of Hormuz has become crucial for oil majors which regularly ship barrels to Asia. Asia's strong crude and oil products demand has prompted oil producers and trading houses such as Litasco, Noble Group and Azeri SOCAR to secure oil storage rights in the Gulf region.
Among the ports outside the Strait of Hormuz, Fujairah, on the east coast of OPEC member United Arab Emirates has become a major bunkering hub for ship refuelling. A new pipeline which can bring Abu Dhabi’s crude to Fujairah by passing the Strait, and a new refinery planned in Fujairah, will give the hub further importance.
But it faces is rising competition from the port of Sohar, in small non-OPEC producer Oman, which is also expanding its facilities by upgrading its refinery. Several oil traders have already secured oil storage space in Sohar.
The Port of Sohar, Oman
A deep-sea port in the Sultanate of Oman is managed by Sohar Industrial Port Company, a joint venture between the government of Oman and the Dutch port of Rotterdam. It has 1.285 million cubic meters of oil storage, all allocated for clean products and all currently leased out and full, trade sources said.
Sohar is also home to a 116,000-barrels-per-day refinery, whose capacity Oman wants to boost by some 50,000 bpd to 60,000bpd by 2016. Traders say there are also additional storage facilities at the refinery.
The Port of Fujairah, UAE
Fujairah’s oil storage capacity is planned to rise to nearly 6.5 million cubic metres in late 2012 from the current near 5, while further expansion that could take the capacity tonear 10 million cubic metres is expected by late 2014.
Vitol has around 1.1 mcm of storage at the port through Fujairah Refinery Company Ltd (FRCL), which is owned by Vitol Tank Terminals International (VTTI) and 10 percent by the Fujairah government. Trade sources say all of the oil products stored in its 47 tanks are owned by Vitol.
Vopak Horizon Fujairah has completed its latest phase of 600,000 cubic metres of expansion and this new capacity came online in early May. Currently Vopak Horizon has a total of 2.1 mcm of storage and a trade source says all tanks are leased out.
Leading commodities and oil traders like Trafigura, Total’s Totsa as well as PetroChina, a relatively new entry in the Gulf trading market, are among the tenants of Vopak’s tanks.
Latest expansion added 20 new tanks for storing fuel oiland clean petroleum products.
UAE-based trader Gulf Petrochem’s 412,000 cubic metres of oil storage is planned to come online in September. UAE’s fuel retailer Emarat currently has 263,000 cubic metres of oil storage capacity following its expansion in 2011. With the addition of 10 more tanks the company now has a totalof 13 tanks for gas oil, gasoline and jet fuel.
Azeri national oil company Socar’s trading arm is building 641,000 cubic metres of storage capacity in a joint-venture with Swiss trading house Aurora Progress and the government of Fujairah. It will consist of 20 tanks for clean and dirty products once the full project completed. The first phase with114,000 cubic metres came online in March.
Global marine fuel supplier Chemoil Energy has storage of around 90,000 cubic metres at the port through a joint venture with Gulf Petrol Supplies and plans to boost it to 675,000 cubic metres by the third quarter of this year.
The UAE’s new oil pipeline for bypassing the Strait of Hormuz, the Abu Dhabi Crude Oil Pipeline Project (ADCOP), and aplanned refinery are expected to add 12 million barrels of storage.
ADNOC already has 1.3 million cubic metres of crude storage just north of Fujairah, which is due to commence operations later in the year, in line with the Fujairah pipeline.
Singapore-based Concord Energy and China’s Sinopec will start building oil storage in Fujairah within two months. The total capacity will be 1.125 million cubic metres and around half of this will be leased to Sinopec. It is due to be completed by early 2014.
Dubai government-owned Emirates National Oil Company(ENOC) also has storage capacity at the port, which it is looking to expand.
The Port of Jebel Ali, UAE
Jebel Ali port is a major regional products blending hub. It is also an important fuel storage site with over 3 million cubic metre (mcm) of capacity at the port near Dubai. Dubai government-owned fuel retailer Emirates National Oil Company (ENOC) is one of the biggest storage owners at the port with its 1.2 mcm of capacity.
UAE-based traders Fal Oil has 80,000 cubic metres and Gulf Refining has 370,000 cm. Star Energy Oil Tanking , a joint venture between Hamburg based Oiltanking GmbH and Abu Dhabi based Star Energy Group Ltd has 920,000 cubic metres of storage.
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Sohar’s Storage Facilities in TankTerminals.com: Oiltanking Sohar
Jebel Ali’s Storage Facilities in TankTerminals.com: Horizon Jebel Ali Terminals, DMCC Terminal, Emoil Petroleum Storage FZCO, Solvochem Emirates, Petrochem Middle East FZE, EPPCO International Ltd
