February 28, 2014 [Platts] - The expansion of the Tankstore terminal in Singapore at Pulau Busing is slated to be completed as early as the third quarter of this year, market sources said this week.
Though initially the completion date was expected to be in the first quarter of 2015, speeding up of the land reclamation and construction processes had helped advance the date, the sources added.
The expansion will add another 800,000 cubic meters of storage capacity to the existing 1.2 M.
Shell Singapore has committed to taking up around 530,000 cu m of tank space for fuel oil and dirty products, while Total Singapore has opted to take 150,000 cu m for similar products, market sources said.
The remaining 120,000 cu m could be set aside either for clean oil products or chemicals, they added.
The contracts were negotiated about two years ago when storage rates were around S$6-7/cu m ($4.73-$5.52) and those are likely the rates that both Shell and Total managed to secure, traders said.
Leaseholders at the Tankstore include BP Singapore and KIB Energy, also known as Kuo Oil, and possibly Total Singapore.
While storage rates hit a high of S$8.50-9.50/cu m around a year and half ago, Shell taking up storage at Tankstore had led some market observers to wonder whether it might give up its existing tanks at Universal Terminal which had the highest rates in the market at the time.
But it is unlikely that Universal would lower its rates to match its competitors’ S$4-7/cu m. Universal remains the most competitive in terms of terminal capabilities in the region, market sources added.
Recent storage negotiations at Vopak Singapore’s terminal were heard to be around S$6.50/cu m on an average, with Sinopec Singapore having taken tank space last year and Repsol Singapore taking over Trafigura’s space from May this year, traders said, adding that rates were unlikely to drop much as a result.
At the Helios terminal in Singapore, the latest entrant is Lukoil Asia, which was heard to have negotiated rates of around S$6.50/cu m as well, market sources said.
They also pointed out that BP Singapore was due for a renegotiation of its rates at Tankstore this year, and being the top bunker supplier on the Maritime and Port Authority of Singapore’s list, it would be expected to require the storage space.
The oil major was recently heard to have expanded its storage capabilities to at least four Aframaxes and one VLCC just to store its fuel oil, the sources added.
