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Consolidating the Mediterranean potential



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The potential for the Mediterranean region to develop as a sustainable storage, trading and logistics hub for petrochemical products gained further momentum at the second Port of Tarragona hub day workshop.
Professionals from across the region and Europe gathered to discuss how to elevate the region as another alternative hub into the continent. The Port of Tarragona is one of the benchmark ports for the petrochemical industry in the Mediterranean and wants to further maximise the region’s potential by understanding and capturing the current trends in the petrochemical market.
On the first day, delegates were given an overview of a resent survey completed by a cross-section of petrochemical companies to further understand their challenges and gain insight into the opportunities available for development.
The results highlighted that areas to improve the competitiveness of the Mediterranean region include improving the water draft, additional storage capacity as well as more of a range of storage types and improving cost competitiveness.
This was followed by a boat tour of the port as well as an exclusive site visit to Tepsa’s storage expansion. The first phases, which is due to be complete by the second quarter of 2019, comprises six tanks with 15,500 m3 of capacity.
Josep Andreu i Figueras, president of the Port of Tarragona, started proceedings on the second day saying that the port of one of the main economic drivers in the region and is a center for entrepreneurship and economic activity.
He told delegates: ‘By combining our efforts and best practice we will consolidate the Mediterranean region as a sustainable alternative for the storage of chemical products.’
Providing an overview of the European petrochemical market and the opportunities for the Mediterranean, Olivier Maronneaud, associate director chemicals at HIS Markit, said that the chemical market has experienced relatively healthy demand and stability.
‘It has been very positive and looking to the next five years it will remain relatively steady, even with a lot of risk in the market.’
While Europe remains the third largest market for chemicals, its relative size is shrinking in terms of supply and demand, according Maronneaud.
He added that in recent years the industry has experienced rounds of rationalisation due to demand and competitiveness however this has finally picked up.
‘Europe is performing better than other regions in the world and this has supported more investment in the region and we have seen some announcements for more capacity.’
Looking to developments in northern Europe, Maronneaud explained that water levels have been a major issue in 2018 and that for the last five months there have been issues with the river affecting barges and the overall supply chain.
‘The situation has not always been as bad as this,’ he said. ‘There is now pressure on companies to find a solution – either changing production or changing logistics.’
Turning to the 2020 IMO marine fuel oil regulation, senior analyst Matt Wright, from Argus Consulting Services, observed that in Q3 2018, scrubber orders significantly increased for tankers in order to meet the January 1 2020 deadline. However, he said that the number of vessels equipped with scrubbers will still be significantly short of the 3,500 vessels that the Delft study said there would be.
Gasoil demand in 2020 is expected to rocket, with 80% of this driven by marine gasoil. ‘The bunker fuel market faces a multi-fuel future, made up of marine
gasoil, 0.5% fuel oil and 3.5% fuel oil. Immediately, marine gasoil will be the preferred one but in the long-term it will be more of a balanced market, with no clear winner.’
Looking at the potential for storage in Spain, Josep Forcadell, sales director at Vopak Terquimsa, said that the east coast of Spain is one of the most important chemical clusters in the region and has the most potential.
He said that Tarragona has several advantages to other ports in Europe, including the fact that it is less congested than ports in the ARA region and that there is the potential for additional capacity, with expansion projects already on track and with land available for further growth.
Providing an analysis on trade flows into the Mediterranean, Mark Williams, managing director of Shipping Strategy, said that Europe is going to be increasingly short of products, while the Middle East will be increasingly long and the US will be increasingly long on crude and products.
He said there will be incentives for shippers and ship owners to optimise traffic flows.



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