October 4, 2021 [SPGlobal] – The Port of Fujairah, the world’s third-biggest bunkering hub, is expecting a record year in throughput for its liquid bulk volumes as the facility continues to grow its services and terminals boost their operations, its business development manager said Sept. 28.
“Liquid bulk is outperforming our expectations,” Martijn Heijboer told the Fujairah APPEC virtual workshop 2021 organized by the Dubai-based Gulf Intelligence.
“Depending a bit on how Q4 is going to be, it is going to be another record year in terms of throughput [of liquid bulk] handled through the port and but also for Fujairah overall.”
Total crude and product volumes handled at the port exceeded 120 million tons in 2020, up from around 110 million tons in 2019, Heijboer told S&P Global Platts previously. The total figure includes volumes at the port’s own Fujairah Oil Tanker Terminals, or FOTT, Abu Dhabi National Oil Co.’s 3 single point moorings, VOPAK Horizon jetty, as well as ship-to-ship transactions, floating storage and bunkering at the anchorage.
ADNOC is also “on target” to link its crude facilities to the port’s matrix manifold system, Heijboer said.
“The ADNOC project of course is ongoing and this is to be completed very soon when they connect their current terminal to us. It is in the final stage to happening and to test the system,” he said.
“I think it’s important to state, it is mainly a contingency connection. The reason why ADNOC is connecting the port is giving them options to use the VLCC jetty and berths besides their own spms.”
ADNOC could not be immediately reached for comment.
Connection to the port
ADNOC’s plans to connect its crude oil storage facility to Fujairah’s manifold, expected in the fourth quarter, “does change the flow a little bit,” Chris Bake, member of the executive committee at Vitol, said.
Asked if the ADNOC connection will be a game changer, Bake said: “It’s another dimension to consider. It’s not going to be massive, today the amount of available crude storage is not massive.” He added that he is not aware that ADNOC wants to sell the crude FOB and leave the oil in Fujairah. “It’s a contingency,” he said.
Fujairah Oil Terminal, or FOT, the largest independent storage terminal at the port by throughput, has begun a $45 million project to connect its crude oil tanks to the port’s VLCC loading facility via the Matrix Manifold 2 and to ADNOC’s ADCOP pipeline, in a bet on a surge in oil trading from the newly started Murban futures on the ICE Futures Abu Dhabi exchange.
The ADCOP pipeline is currently being connected to the port’s Matrix Manifold 2, which will be the basis of linking the ADCOP pipeline to FOT, Dave Noakes, senior managing director at Prostar Capital, which owns 40% of FOT, told Platts previously.
Project delay
Fujairah has strengthened its position during the pandemic, with plans to connect the emirate by rail with the rest of the UAE and ADNOC building crude storage caverns in its mountains, said Bake.
ADNOC is developing underground caverns at Fujairah that will be able to store 42 million barrels (6.72 million cu m) of crude oil. The project may face delays because of the pandemic, Capt. Ali al-Abdouli, deputy manager of FOTT said.
“Like any other project, there was I think a slight impact by the pandemic,” said Abdouli. “I think ADNOC is going to try their best to meet their target.”
UAE-based Ecomar and Brooge Petroleum and Gas Investment Co. are also expanding their storage facilities at Fujairah, which is located outside the key shipping chokepoint of the Strait of Hormuz.
Game changer
Fujairah officials expect growing crude storage and trading will be a game changer for the port, which currently handles mainly oil products.
“The availability of Murban and other brands of crude in Fujairah will definitely benefit the whole market and will support our position as being the global energy hub in this sector,” said Abdouli.
“Being one of the biggest storage hubs for crude is going to be a game changer for us in Fujairah because it will mean more utilization of the current and future storage capacity, more utilization of the port infrastructure, more movement and liquidity of products which ultimately will mean more vessels, more bunkering activity and more services and logistics.”
The Port of Fujairah expects its oil storage capacity to triple to 12 million cu m by 2024 as ADNOC and other terminal operators expand their facilities, Heijboer told Platts earlier this year.
BPGIC is one of these terminal operators that has started operations at its 600,000 cu m second phase storage facility at the Port of Fujairah, bringing its total capacity to around 1 million cu m.
More oil is moving in and out of the port this year than 2020, and demand for products such as gasoline, gasoil and fuel oils is gradually coming back from countries that are traditional users of the port, said Malek Azizeh, operating partner at Prostar Capital.
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