ASIA FOCUS: THE RISING STAR
The Asian financial crisis
of the late 1990s is a
distant memory, for
industry at least. Last year's
deregulation of the petroleum
sector in Indonesia, the
recent World Trade
Organisation (WTO) entry by
Vietnam and the blooming of
the biofuels market across
the region are all contributing
to a healthy outlook.
Underpinned by strong
economic growth and demand
for products in China and
throughout the region,
particularly for transportation
in the case of fuels and
general industrial demand for
petrochemicals, the future for
storage and transhipment
looks rosy.
Despite the region's
apparently insatiable thirst for
feedstock and fuels - by
2010, the petrochemical
consumption of China alone is
forecast to be one-third of
the world total - caution
remains the watchword and
new investors should be wary
of charging in like the
proverbial bull.
The influential BP Statistical
Review of World Energy
shows that Asia Pacific
demand for refined products
increased from 18.1 million
barrels a day in 1995 to
23.96m b/d in 2005, and
Asian demand growth has
accounted for nearly half of
the increase in total global
demand in the last four
years. At the same time,
petrochemicals demand is
growing faster in Asia than in
any other region. With these
trends set to continue,
storage capacity needs and
opportunities will increase in
the coming years in China,
Indonesia, Singapore,
Vietnam, Thailand and South
Korea.
Certain Asian ports are
among the busiest in the
world. Singapore, for
example, is one of the world's
top five bulk liquids ports in
volume terms, and is
expanding its already
substantial independent oil
storage capacity in order to
strengthen its position as
Asia's leading oil refining,
trading and blending centre.
A number of major terminal
projects are nearing
completion, including a first
phase of 1.5 million cubic
metres (cu m) of
underground storage capacity
to be built on the oilpetrochemical
hub of Jurong
Island by 2010.
Recent capacity additions
by overseas independents
Vopak, Oiltanking and
Emirates National Oil
Company-subsidiary Horizon
Terminals have together
added more than 1.5m cu m
in new tank capacity in
Singapore, and this will be
further augmented in 2007,
when a new 2.3m cu m
terminal is brought on stream
by local trading giant Hin
Leong. The Korean port of
Ulsan, the country's largest in
bulk liquid terms, is also
becoming increasingly
important as a transhipment
hub for China.
The demand side might be
healthy, but there are still
hurdles. Tightly controlled
national markets are every
foreign industrialist's worst
nightmare, with such controls
meaning a huge knot of
impenetrable red tape, a
barrage of government
officials with a seemingly
endless stack of documents
to be reviewed and stamped,
and profit-limiting operating
restrictions that can reduce
the commerciality of a deal so
much that it becomes only
the symbolic first step of
entry.
