March 19, 2012 [Reuters] - Vopak may develop crude storage facilities outside the Strait of Hormuz in response to rising Iraqi exports and a new UAE oil pipeline, a senior executive from the world's largest independent storage tank operator told Reuters on Monday.
“Abu Dhabi’s game-changing pipeline project and Iraq’s increasing exports create new opportunities for us,” the Vopak executive said.
“These two developments together bring a new dynamic to the market,” he said.
OPEC member Iraq’s oil sales have been limited by decades of infrastructure neglect, due to war and sanctions, but are expected to rise to a post-war record of over 2.3 million barrels per day (bpd) next month.
The delayed Abu Dhabi Crude Oil Pipeline (ADCOP), which should give crude from the United Arab Emirates (UAE) an overland Hormuz bypass route out of the Gulf, is not expected to be operational before the end of 2012.
But Vopak, which already has oil products storage facilities on the east coast of UAE, is already studying the possibility of building crude tanks on the Gulf of Oman coast.
He did not give details for the potential investment or a potential timeline. He also declined to say if Vopak was in talks with UAE authorities about storing oil.
The major storage hubs and ports in the region and outside the Strait of Hormuz are in Fujairah, on the east coast of the UAE, and the port of Sohar in non-OPEC oil producer Oman.
Access to oil storage capacity near the entrance to the strategic Strait of Hormuz is becoming increasingly important for oil companies shipping ever more barrels to Asia, especially after Iranian threats to block the world’s largest oil shipping route.
Netherlands-based Royal Vopak already has a partnership with Horizon Terminals, the government of Fujairah and Kuwait’s Independent Petroleum Group (IPG) in the port of Fujairah.
The joint venture has around 1.5 million cubic meters of oil products storage and another 600,000 cubic meters is due to become operational next month.
Vopak, which offers oil, chemical and biofuels storage in the world’s top bunkering hubs Singapore and Rotterdam, also has chemical products storage capacity in Saudi Arabia (Al Jubail, Yanbu).
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