Vopak eyes Europe, Asia for rolling out new business sector
09.30.2009 - NEWS
Royal Vopak NV, one of the world's biggest independent oil and chemicals storage companies, is eyeing Asia and Europe as growth markets for its planned liquefied natural gas business, a company executive said. "We focus on Europe and the Asian countries bordering the South China Sea, like Indonesia, Singapore, Vietnam and the Philippines," Vopak LNG Managing Director Dirk van Slooten told Dow Jones Newswires in an interview.

“We focus on Europe and the Asian countries bordering the South China Sea, like Indonesia, Singapore, Vietnam and the Philippines,” Vopak LNG Managing Director Dirk van Slooten told Dow Jones Newswires in an interview.
“We’re at the stage of studying the options. The key questions we ask ourselves are: which country has a large population, where do we see rising energy demand, a future gas shortage and a splendid gas network. Those kind of countries are very attractive,” he said.
The U.S. has become a less appealing area for investment, however, as recent discoveries of unconventional gas reserves there have resulted in a collapse in demand for LNG imports, Van Slooten said. “Three years ago several companies planned to build around sixty terminals there, of which only two or three have been realized. So in the short term it won’t be interesting for us to enter that market.”
Vopak, originally an oil and chemical storage company, wants to break into the LNG market by developing and operating LNG regasification terminals, in which LNG is heated and turned into gas again and transported to customers through pipelines. The terminals will provide a “buffer” between supply and demand, while long-term contracts with either suppliers or buyers should secure a stable income for Vopak, Van Slooten said. “We neither buy nor sell gas, we only provide services.”
Even though most of Vopak’s plans to enter the LNG market are still on the drawing board, analysts are bullish on its prospects in this business. “LNG is a logical supplement to diversify our portfolio,” Van Slooten said, adding that he couldn’t give an indication of LNG’s future share of Vopak’s total revenue. “It is not sensible to give a number at this stage.”
The global LNG market is facing oversupply, with an enormous chunk of liquefaction capacity coming onstream at the same time as global gas demand plummets because of the recession. “The sky was the limit when we started in 2005, with suppliers ruling the world and no one expecting that to change. The LNG market is a buyer’s market now,” Van Slooten said.
Still, the changed landscape won’t affect Vopak much, he added, as long as the company has long-term contracts with either customers or suppliers. “Think of how it works in the hotel business: you book a room and whether you plan to use it or not, you’ll have to pay anyway.”
Vopak hopes to have a second or third LNG terminal onstream by 2016, Van Slooten said, referring to the firm’s plans to develop LNG terminals in Fos-sur-Mer in southern France, Rostock in Germany and Eemshaven in the Netherlands. The final investment decisions on the Eemshaven and Rostock projects depend on the success of Gate terminal, Van Slooten said. “We first fill up Gate with LNG, then we’ll think about how we go forward.”

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