UAE's Fujairah Gets Third Oil Refinery, New Storage Tanks in Quest to Build Hub
06.22.2020 - NEWS

June 22, 2020 [S&P Global Platts] – Ecomar Energy Solutions has started operations of the third oil refinery in Fujairah as the emirate on UAE’s east coast builds its role as an oil trading and bunkering hub.

The Ecomar refinery has capacity of 15,000 b/d to produce naphtha, kerosene, gasoil and residual fuel, with storage capacity of 130,000 cubic meters (1.09 million barrels), Leigh Shaddick, Ecomar’s trading director, told S&P Global Platts on June 18. There are plans to expand the refinery and 16 storage tanks, he said. The crude used is currently imported Arab Heavy and Light grades, at about 15,000 mt a week.

“We would love to do business with all the producers in the region, Iraq, Saudi Arabia, Kuwait, Abu Dhabi and Oman,” Shaddick said. “We could have rented 10 times over our storage capacity but for now we need every cubic meter we have for our own storage.” Product in storage is averaging about 80% full, he said. Some parcels have been exported to India, with the majority sold in the UAE.

Fujairah, with its strategic position outside the volatile Strait of Hormuz, has risen rapidly in the last two decades to become one of the largest global bunkering and oil trading ports. At the free zone just north of the main city, the landscape between the rugged mountains and the ocean is dominated by rows of tall, cylindrical oil tanks on both sides of the highway.

Abu Dhabi’s national oil company, ADNOC, has a crude export terminal there, fed from its 1.5 million b/d Habshan pipeline. Under one of the mountains, ADNOC is excavating caverns that will form the world’s largest single-site underground storage reserve, holding 42 million barrels of crude.

ENOC, Vopak

Dubai’s Emirates National Oil Co., Fujairah Oil Terminal, Vopak and Gulf Petrochem are among the other companies with tank farms at the port, while Vitol has an 82,000 b/d refinery and Uniper Energy owns a LSFO plant.

In April, UAE-based Brooge Energy, a subsidiary of Brooge Petroleum and Gas Investment Co., appointed a consultant to complete the basic design for a 180,000 b/d refinery and a study for oil storage terminals adjacent to the Port of Fujairah. Its first 14 tanks, which can hold 400,000 cu m of middle distillates and fuel oil, became operational in January 2018.

The first 25,000 b/d unit of the Brooge refinery was expected to be operational by the end of this year, CEO Nicolaas Paardenkooper said in February.

Ecomar Energy, unrelated to Finland’s Ecomar Ltd., was formed in 2013 and began operating the refinery and 16 storage tanks two months ago. It has three pipelines to the port, and a trucking system allowing for export and import of products and crude.

Storage capacity will be increased by 60,000 cu m in phase 2, and to a total of 500,000 cu m by 2022, Shaddick said.

“Everything has been commissioned, the pipelines have been commissioned to the port and the refinery is having smooth production,” he said.

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