Profile: Ulf Vleeshouwers, Managing Director of Nordic Storage, talks about the challenges and opportunities of being a terminal operator in the Baltic region...

In recent times, contango in the oil market has been a key business driver for terminal operators in the Baltic, says Ulf Vleeshouwers.

Speculation on the future price of oil has increased the demand for storage. Clients of Nordic Storage are also using its deepwater Baltic terminals to build up bulk volumes of oil products coming out of Russia, and then ship them long haul when the price is right.

"We have terminals at Stigsnaes and Aabenraa in Denmark which can take very large crude carriers with the maximum Baltic draft of 15 metres," says Ulf. "We accumulate small cargoes of oil products, which are then transhipped in larger lots to the USA and Asia."

It's good business for Nordic Storage, which controls around 2.5 million cu m of liquid bulk storage capacity at around 22 terminals in Sweden and Denmark, and is ideally placed to take advantage of the trend. But speculationdriven storage is also a somewhat fickle business.

"Contango is very unpredictable," says Ulf. "You can't live on it because it comes around so seldom."

Fortunately for Nordic, speculation is only one of the reasons why storage and transhipment out of Baltic ports is attractive to buyers. The economies of scale to be gained from building up bulk cargoes and then shipping them out on large carriers mean that even without the contango factor, Nordic Storage's deepwater terminals would be in demand. Around 120 million tons of Russian oil products sail out of the Baltic each year.

While much of that is destined for Rotterdam, Antwerp and Amsterdam, a lot of it is going long haul. Nordic has the capacity to tranship about 2-3 million tons of it.

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