October 21, 2019 [S&P Global Platts] – Abu Dhabi National Oil Company, which set up a trading arm with Italy’s Eni and Austria’s OMV this year, was expected to start trading crude products from Port of Fujairah in the second half of 2020, a port official said Thursday.

ADNOC, Eni and OMV formed their trading venture — ADNOC Global Trading — at the UAE capital’s financial freezone, Abu Dhabi Global Market and are expected to start physical trading next year, ADNOC said in July.

Eni and OMV agreed in January to establish a trading joint venture, in which they will own stakes of 20% and 15%, respectively.

The trading arm will transport products from Ruwais, the industrial hub west of Abu Dhabi where ADNOC’s main refinery is located, said Martijn Heijboer, business development manager at the Port of Fujairah. The first product to be traded was expected to be gasoline. ADNOC was not available for comment.

“By the second half of next year, we expect ADNOC (Global) Trading to go live meaning they are going to move products from Ruwais…move it to Fujairah and start blending and trading it,” Heijboer said at the Middle East Executive Petroleum Conference in Abu Dhabi on Thursday.

“This will be a big contribution to Fujairah and, of course, ADNOC and Aramco’s presence is attracting others as well.”

ADNOC’s new trading arm would follow the opening of a Fujairah office for Aramco Trading this year as both companies seek to capitalize on the eastern UAE emirate’s position outside the Strait of Hormuz, where tankers have been attacked this year.

ADNOC is also building the world’s biggest single-site underground storage caverns, which will hold 42 million barrels of oil by 2022 when the project is finished.

“The first development in Fujairah is very much around storage and trading of refined products. I think now we are about to start a second wave of development in Fujairah which will be very much around crude and is obviously very much driven by ADNOC,” Heijboer said.

The state-owned company, which pumps most of the UAE’s estimated 3 million b/d of crude oil, also has a 1.5 million b/d pipeline connected to the Port of Fujairah that carries Abu Dhabi’s flagship Murban crude oil for export.

Murban futures

ADNOC and the International Exchange were expected to launch a Murban futures contract on a new exchange in Abu Dhabi in the first quarter of next year as the state-owned company seeks to create a regional benchmark, sources said last month.

“ADNOC is keen to connect this (Murban oil) Terminal to the port of Fujairah. This means it will give them access to our VLCC jetty as well other terminals,” Heijboer said. “Also by connecting to the port it means connecting to all other 15 terminals and this will allow ADNOC to trade as per their ambitions.”

Fujairah, which currently has a storage capacity of 10 million cu m, expects to grow to 11.1 million cu m next year as more companies add terminals, particularly oil, he said.

To cater for the demand, the port plans to add another 700,000 square meters of land by 2022 as well as adding more berths to its current nine, expanding its pipeline infrastructure and probably building a second VLCC jetty, which could also be utilized by ADNOC and others.

“Crude is definitely the new wave for Fujairah to go,” Heijboer said. “We also believe with crudes in systems we will probably more likely attract more downstream activities.”

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