As the third largest oil storage and petroleum products trading center and second largest bunkering port in the world, Fujairah is in vogue in the storage industry
Fujairah Oil Terminal (FOT) broke new ground as the first independent crude oil storage terminal in the Middle East and seeks to capitalise on its coveted position within the influential storage hub.
Nestled close to the Port of Fujairah, a thriving oil products trading hub, the facility boasts 1.17 million m3 of capacity spread across 34 tanks and despite land constraints making it difficult to expand with ease, the company has its sights firmly set on future expansions.
In an interview with Tank Storage Magazine, commercial director Malek Azizeh, says that the area is an attractive proposition for traders and operators, principally due to the range of services and the level of connectivity at the port of Fujairah.
‘Fujairah offers the trading environment a one stop shop of services. You can bunker, trade and maintain your vessels – other ports in the region have not yet reached that level of service.
‘It is commercially designed – you can transfer products back and forth to each other and traders can buy from each other and can then easily transfer the product without the need for a ship via the port’s matrix manifolds.
‘You pay a premium to be in Fujairah as there are large storage capacities and a variety of terminals.’
As a result of growing volumes through the port, in 2015, the Port of Fujairah set a new personal record and achieved just over 50 million tonnes of throughput.
This has helped position the region as the third largest oil products hub, and its location close to the Strait of Hormuz, the world’s most important oil transit chokepoint reinforces its importance. Additionally, the continued focus on diversification in Fujairah is resulting in investments being made in the downstream sector including product specialty chemicals, bitumen and biofuels refineries as well as chemical storage.
Azizeh says: ‘In terms of location, Singapore might be better than Fujairah because you cover the whole of Asia. But Fujairah is taking on Singapore because it has the connectivity features between all the various terminals via a common user matrix manifolds which Singapore lacks.
‘Fujairah has managed to link them all together and this is very crucial. Fujairah is bringing something new to the market.’
FOT is owned by China’s Sinopec (50%) Australia’s Prostar Capital (40%) and Government of Fujairah (10%). FOT is considering expansion options and currently evaluating future market outlook to build the most suitable tanks for the future. As crude storage and throughout volumes are gaining momentum thanks to Adnoc’s large crude storage facility (8 million barrels) and the port’s considerable investment in the Very Large Crude Oil Carriers (VLCC) berths, many terminals in Fujairah are now considering building crude tanks instead of the traditional refined products tanks which is the majority of Fujairah’s current capacity.
‘There are plenty of things happening in Fujairah, a new refinery will be coming into operation and Vopak has a project which will be commissioned imminently as well as IPIC’s announcement for building a 200kbd refinery ‘There is also the positive spin from the lifting of Iranian sanctions is that oil traders will be looking to supply and receive products from Iran and as a result there will be even more demand for storage in Fujairah.’