Latest storage news
Reliance Industries and Saudi Aramco have agreed to a non-binding letter of intent regarding a proposed investment in Reliance's oil to chemicals division comprising refining, petrochemicals and fuels marketing.
Saudi Aramco's potential 20% stake is based up the division having an enterprise vale of $75 billion. As a result, this would be one of the largest foreign investments ever made in India.
The terms of the deal are yet to be finalised but according to Wood Mackenzie, company officials have said that Reliance will get roughly $!5 billion, including some debt adjustments.
For more than 25 years both companies have had a long-standing crude oil supply relationship. Saudi Aramco has supplied 2 million barrels of crude oil for processing at Reliance's refinery at Jamnagar. The company says the Jamnagar refinery is the largest and most complex in the world, with deep integration of refining and petrochemical activities across multiple manufacturing facilities.
The proposed investment would result in Saudi Aramco supplying 500,000 bpd of Arabian crude oil to the Jamnagar refinery on a long-term basis.
Mukesh Ambani, chairman and managing director of Reliance Industries, says: 'I am truly delighted to welcome Saudi Aramco, one of the largest business enterprises in the world, as a potential investor in our oil to chemicals division.
'We have a long-standing crude oil relationship with Saudi Aramco, and we would be happy to see this further strengthened with this investment. Saudi Aramco's interest is a strong endorsement of the quality of our assets and operations as well as of the potential of India.'
Wood Mackenzie's vice president refining and chemicals Alan Gelder says: 'The deal is further evidence that Saudi Aramco is executing on its long-term strategy to increase its refining and petrochemical capacity. This strategy is being achieved through a combination of projects and acquisitions.
'Saudi Aramco continues to show keen interest in accessing the Indian market, which has the strongest long-term growth prospects. Aramco is also demonstrating discipline in targeting strongly competitive assets that are well placed, through petrochemical integration, to be sustainable through the energy transition.'
The parties will make an announcement one a definitive agreement is executed.
Inter Pipeline is exploring the potential sale of its European bulk liquid storage business, saying it is consistent with the company's practice of marking prudent, long-term portfolio management decisions.
The company says that should a sale be completed, proceeds could be used to reduce outstanding debt and finance Inter Pipeline's capital expenditure programme, including the Heartland Petrochemical Complex.
Christian Bayle, president and CEO of Inter Pipeline, says: 'Inter Terminals is a high-quality business with outstanding management and staff. It has made an important contribution to the success and growth of Inter Pipeline over the past 14 years.
'Our decision to explore alternatives is consistent with Inter Pipeline's practice of making prudent, long-term portfolio management decisions particularly in light of our organic growth initiatives.'
Inter Terminals' portfolio of assets spans operations in the UK, Denmark, Sweden, Germany, Netherlands and Ireland. It has 37 million barrels of storage capacity across 23 terminals. These terminals are long life infrastructure assets that are strategically located close to established global market hubs, product delivery channels, refineries and chemical production facilities.
This process is not expected to have an impact on Inter Terminal's operations, which are continuing in the ordinary course. Inter Pipeline has not established a definitive timeline to complete this process and there is no assurance that a transaction will result from it.
With petroleum product demand continuing to outstrip supply in the future, India's reliance on imported fuels presents a strong opportunity for independent storage operators to invest in the country's logistics infrastructure.
Strong demand in industrial and automotive sectors, coupled with growing population and increased GDP growth is pushing the country's oil requirement to higher levels.
Economic reforms in the 1990s opened up the country to private and foreign investment across various sectors, particularly in the energy sector. However, despite investment in the country's production capacity, thanks to private sector development in the refining sector from 2000 onwards, the country still needs some imports since there is always a lag in creating refining capacity to meet the demand for cooking fuel and transportation fuels.
With demand for petroleum products expected to be 380 million tonnes by 2030 from the current level of 220 million tonnes, there is plenty of scope for independent terminal operators to exploit these favourable investment opportunities.
In an interview with Tank Storage Magazine, Sridhar Ramamurthy, downstream advisor, explains that India's energy consumption per capita is one third of the global average and that strong demand is expected to be sustained.
'This demand will exceed indigenous availability of refined products, which will necessitate imports at coastal locations. Though there are plans to expand and add additional capacities progressively, the supply is expected to lag behind demand.
'Regional imbalances of demand and supply will also require coastal movements to consuming locations from refineries. Therefore, storage and distribution terminals must be created to receive product by various modes such as pipeline, rail and ships.'
Enhanced safety regulations and an inability to upgrade existing terminals to improve productivity are the main drivers for new investment in the country. Ramamurthy says that government and private oil companies are keen to hire rather than significantly invest and are expressing an interest in outsourcing terminal operations.
'To enhance refinery capacity and pipeline transportation, which is a core priority, oil companies in India are pursuing different models of collaboration with reputed terminal operators through joint ventures and build, own, operate and transfer for marketing and distribution activities. Scope exists for independent terminal operators to exploit the opportunities to invest.'
However, availability of land at reasonable rates, regulatory issues as well as statutory safety standards present a challenge for independent terminal operators. Additionally, limitations of port facilities such as draft size, congestion and bankable guaranteed utilisation and rental agreements with users are also challenging.
'Many of the inland terminals are being created by oil companies to receive product by pipeline or rail, so unless these companies decide to outsource the terminal operation or share the investment, the scope for developing inland terminals is limited,' explains Ramamurthy.
'However, with significant emphasis on creating, expanding and modernising port facilities, there is an urge to develop high capacity terminals in port locations to optimise coastal transportation costs.
'With demand exceeding operable refining capacity until at least 2030, import and coastal movements cannot be avoided, thus creating a strong need for coastal terminals.'
Ramamurthy will be talking more about the opportunities and challenges of setting up petroleum products storage terminals in India on the second day of the Tank Storage Asia conference in Singapore on September 25 & 26. For more information visit www.tankstorageasia.com.
Qatar Investment Authority has acquired a significant stake in Oryx Midstream Services from Stonepeak Infrastructure Partners for $550 million.
The partnership is the latest in a series of investments undertaken by QIA across the US where QIA aims to increase investment to $45 billion in the coming years.
Since it was created in 2013, Oryx has become one of the leading midstream operators in the Permian Basin in the southwest US. The Oryx system transports crude oil to market hubs for ultimate delivery to the Gulf Coast. The system helps supply domestic refineries and the growing US export market. Upon completion of the remaining part of the system under construction, Oryx's total transportation capacity will exceed 900,000 barrels per day and access multiple takeaway options.
Mansoor Al-Mahmoud, CEO of QIA, says: 'We believe that Oryx represents a strong midstream platform with tremendous growth potential, and we look forward to working with our new partners at Stonepeak. This acquisition is a further demonstration of QIA's strategy to increase the size of our US portfolio, and to invest more in major infrastructure projects.'
Oryx CEO Brett Wiggs adds: 'The significant investment and commitment from QIA alongside Stonepeak's strong operational and capital support will allow us to continue to grow our footprint in the Permian Basin and deliver the highest level fo service to current and future customers.'
Inter Pipeline has received commercial support for the construction of a $100 million pipeline connection between its Bow River and Central Alberta pipeline systems.
The new pipeline, called the Viking Connector, will link various grades of light crude oil from the Viking and Mannville formations in east-central Alberta to the Edmonton market hub.
The $100 million investment is the second phase of a multi-phased development programme for the Central Alberta pipeline system. This phase includes the construction of 75 kilometres of eight-inch diameter pipeline that will connect Inter Pipeline's Throne Station on the Bow River pipeline system to the Central Alberta pipeline system in the Stettler area.
Christian Bayle, president and CEO of Inter Pipeline, says: 'The Viking Connector enables us to cost effectively leverage our extensive regional pipeline network and provide customers with superior market access. Producers in the Alberta Viking and surrounding plays are currently limited to pipelines services to the Hardisty hub or costly trucking alternatives. This connection will provide economical access to the Edmonton market hub, which historically has been a premium market for Alberta light oil products, a clear benefit for producers.'
Additionally, the company will complete upgrades to the Throne Station, which includes reconfiguring existing tank storage and expanding truck offloading capacity. Construction will begin immediately and is expected to be completed in the first half of 2020.
Once complete, Inter Pipeline forecasts throughput volume of 10,000 to 15,000 barrels per day on the Viking Connector, with one third of forecast shipments currently secured for a 10-year term. Additional term transportation agreements are under negotiation and contracted commitment levels may rise by the in-service date.
Phase one of the Central Alberta development programme includes the conversion of the pipeline system to multi-product batch operation, and construction of additional truck offloading and tank storage capacity at the Stettler Station. Batch operations began in mid-2018 and an additional 10,000 barrels per day of truck unloading capacity is expected to enter service in the fall of 2019. Two new 130,000-barrel storage tanks, the final component of phase one, are expected to be complete by the spring of 2020. Further phases may be required over the next several years to support additional production growth.
Texas Deepwater Deer Park Terminal and Equilon Enterprises d/b/a Shell Oil Products US have completed the retrofit and refurbishment of the Deer Park Rail Terminal on the Houston Ship Channel on time and on budget.
The terminal has the capability of loading up to 48 railcars per day, which is around 33,000 barrels of refined products per day. The terminal can also provide additional value-added services including the capability of adding lubricity additives and red dye. The facility is equipped with two operation tanks with 50,000 barrels of total storage capacity, which will service the railcar loading rack at the terminal with direct pipeline connectivity to the Deer Park Refinery and the Colex Products Terminal.
While the initial focus will be on loading diesel into railcars initially destined to Mexico and the Permian Basin, there may be a potential to further expand the terminal by adding incremental storage capacity and rail loading capabilities to handle additional refined products. The terminal continues to receive strong interest from multiple potential customers pursuing long-term agreements at the facility.
While DRPT currently has some remaining uncommitted capacity, the company expects to fully contract the remaining capacity in the near term.
Odeh Khoury, vice president, Shell Products Trading & Supply Americas, says: 'As we continue to pursue ways to optimise our integrated value with Shell's joint venture in the Deer Park Refinery, the Deer Park Rail Terminal will once again serve as an important channel to a variety of markets.'
Larry Ruple, TDWP's executive vice president of business development, adds: 'The DRPT adds much-needed takeaway capacity for refined products in the strategic Houston Ship Channel market.'
ADNOC has acquired a 10% equity stake in VTTI, providing it with access to storage capabilities across key exports markets in Asia, Africa and Europe.
Following the transaction VTTI will be owned 10% by ADNOC, 45% by IFM Global Infrastructure Fund and 45% by Vitol.
VTTI owns 15 hydrocarbon storage terminals across 14 different countries with a combined capacity of 9.5 million m3, much of which is in locations complementary to ADNOC's trade flows.
The investment also secures ADNOC additional facilities at the port of Fujairah, UAE, its main storage hub. This transaction also significantly contributes to the development and growth of ADNOC's global marketing, supply and trading platforms, providing greater access to knowledge and capabilities that will further enable ADNOC's growth plans.
H.E. Dr. Sultan Ahmed Al Jaber, UAE minister of state and ADNOC CEO, says: 'We are delighted to be entering into this strategic investment opportunity in VTTI, alongside Vitol and IFM GIF, which will further complement the development of ADNOC's integrated global trading platform while also delivering a solid financial return.
'VTTI's diverse portfolio of storage assets across key target markets such as Asia, Africa and Europe, provides us with direct access to our customers around the world, a key building block to accelerating ADNOC's transformation into a more integrated and commercially-minded global energy player.
'As one of Fujairah's largest storage operators, VTTI is a natural partner for ADNOC. This investment further strengthens ADNOC's strategic position in Fujairah and supports the continued development of Fujairah as a strategic hub for our operations.'
By expanding its international storage capabilities and reach, ADNOC will move closer to its customers, allowing it to be more agile and respond quickly to market needs and dynamics. It will also unlock incremental revenue, margin and cost saving opportunities from the trading, transportation and storage of its products, giving ADNOC better control over where, when and how its products are being supplied to key markets and customers.
Rob Nijst, CEO VTTI, adds: 'This exciting development is testament to the professionalism and dedication of our VTTI colleagues. Since VTTI was founded 13 years ago, we have worked tirelessly to build a market-leading hydrocarbon storage company, capable of delivering the highest standards of service in key strategic locations. We are very pleased to have ADNOC as our new shareholder and look forward to benefiting from their regional expertise, working together to further grow our global network of terminals and supporting ADNOC's trading and supply ambitions.'
VTTI will continue to be managed by an independent management team led by CEO Rob Nijst.
Total has agreed to sell a 30% interest in Société des Transports Pétroliers par Pipelines (Trapil) to Pisto SAS for €260 million.
Trapil was established to build and operate a pipeline and auxiliary installations to transport refined petroleum products between the Basse-Seine and Paris regions. Trapil is Europe's oldest, largest civilian pipeline network, comprising 1,375 kilometers of pipeline and 27 delivery terminals.
Jean-Pierre Sbraire, CFO of Total, says: 'The sale of Total's interest in this infrastructure reflects its active portfolio management strategy. Rather than own infrastructure assets, the group's aim is to hold contracts to use such infrastructure when needed to manage its industrial assets. This sale will help us achieve our target of divesting $5 billion in assets over the period 2019/2020.'
Following the transaction Total will remain a minority shareholder with an interest of 5.55% and will continue to use Trapil infrastructure under the current terms and conditions to carry products from the Normandy and Grandpuits refineries.
Stolthaven Terminals has divested its Altona chemical storage terminal to the Australasian Solvents & Chemicals Company (ASCC).
The facility in Melbourne, Australia, offers specialised blending facilities, storage and warehousing of both chemical and non-chemical products as well as combustible and/or dangerous goods in bulk and packaged products.
The terminal offers storage for a wide range of dry products, petroleum and chemical liquids.
Guy Bessant, president of Stolthaven Terminals, says: 'A decision was made to divest the Altona terminal in line with our regional strategy. We know ASCC well as an existing customer, with a strong brand in the market, and know they will provide continuing support to our valued customers in the area. The Australian chemical market will benefit from ASCC's expertise as they take on management of the site.
ASCC's group CEO Leanne Wilkins says: 'For ASCC to invest in Altona, we know that we are committing to the Australian manufacturing markets long term. Altona will continue its operations in supplying quality blending, storage and distribution facilities to existing and future customers.'
Altus Midstream has acquired a 33% equity interest in the Enterprise Products Partners subsidiary that owns the Shin Oak natural gas liquids pipeline.
The pipeline transports growing NGL production from multiple basins, including the Permian, to Enterprise's NGL fractionation and storage complex in Mont Belvieu, Texas.
Supported by long-term customer commitments, the pipeline will ultimately have capacity to transport up to 550,000 barrels per day of NGLs by the fourth quarter of 2019.
NGLs for the system are sourced primarily from Enterprise's Orla natural gas processing complex in Reeves County, Texas, as well as Apache Corporation's Alpine High play, via a long-term NGL sales agreement committing 100% of NGLs from that acreage.
Clay Bretches, CEO of Altus Midstream, says: 'Shin Oak is integrated with Enterprise's existing pipelines and gas processing plants, which provide supply from multiple basins. This integration, along with connectivity to Enterprise's fractionation complex in Mont Belvieu, drives substantial volume through the pipeline and provides superior flow assurance for customers, which is significant competitive advantage for attracting additional third-party business.'
'We are very pleased to have Altus as a partner in the Shin Oak Pipeline, which facilitates continued growth of Permian Basin NGLs that are expected to more than double by 2025,' says A.J. 'Jim' Teague, CEO of Enterprise's general partner.
'In addition to providing much-needed takeaway capacity for NGLs, Shin Oak is a key asset in Enterprise's integrated midstream network, which provides unparalleled access to the most attractive domestic and international markets.'
Pin Oak Corpus Christi has started construction work on its new crude oil trading hub, including the construction of a storage facility.
The Taft Terminal will complement Pin Oak's Corpus Christi terminal, a four million barrel storage facility with export-capable Suezmax and MR docks, due to start operations in the fourth quarter of 2019.
Construction of 1.7 million barrels of crude oil tankage at Taft Terminal has started, and there is potential to build an additional 2.8 million barrels of crude oil tankage. The terminal will have connectivity to Corpus Christi and Ingleside markets, Pin Oak Corpus Christ, including its key infrastructure and long-haul pipelines.
Additionally, the company has announced new interconnection agreements with Epic Pipeline and Red Oak Pipeline. The Epic Pipeline interconnection is capable of receiving crude oil from the Permian Basin and Eagle Ford Shale while the Red Oak Pipeline interconnection is capable of receiving crude oil from the Permian Basin, Bakken Shale, DJ Basin and Niobrara Basin.
Corey Leonard, CEO of Pin Oak, says: 'The execution of these new pipeline interconnections and commercial commitments supports the build-out of our Taft Terminal, and creates a unique service offering. Pin Oak's ability to receive product volumes from the most prolific basins in the US will deliver to our customer's unparalleled optionality and access to both domestic and international markets alike, further facilitating essential diversification for US producers.
'Our activities at Pin Oak's Taft Terminal only add to the economic growth for the local economy in and around Corpus Christi.'
As of Monday, July 29 total oil product stocks in Fujairah stood at 18.255 million barrels, drawing down 1.124 million barrels week on week. Overall product stocks fell by 5.8% with a large drawdown in heavy distillate stocks, while light stocks showed a small build with middle distillate stocks largely unchanged.
Stocks of light distillates rose by 241,000 barrels reflecting a build of 3.2% week on week. Total volumes stood at 7.724 million barrels. The gasoline market East of Suez was seen as steady with a largely balanced picture, trade sources noted. 'Physical [gasoline] market is still quite balanced, sentiment has gotten weaker, especially after the news of China's third round export quotas,' a source noted. The FOB Singapore 92 RON gasoline crack against front month ICE Brent crude futures stood at $5.48/b Tuesday, reflecting a fall of 4 cents/b week on week, S&P Global Platts data showed.
Stocks of middle distillates fell by 0.3%, subtracting 6,000 barrels to stand at 2.095 million barrels at the start of the week. Middle distillate sentiment East of Suez remained relatively bullish with the continuous supply tightness in North Asia supporting the market, sources noted. 'It's the refinery turnaround season, plus there are still some ongoing outages,' a source said. The strength was reflected in the EFS which reflects the spread between 10ppm Singapore gasoil swaps and ICE low sulfur gasoil futures, which flipped into positive territory for the first time in 10 months at the start of the week.
Stocks of heavy distillates fell by 13.9%, dropping by 1.359 million barrels on the week to stand at 8.436 million barrels. Activity in Fujairah has picked up with availability of bunker barges at the port tightening as a result, sources said. 'Cargo is not tight, just barges [are] busy with jobs,' a source noted. The spread between 380 CST delivered bunker in Singapore and Fujairah was assessed at $27.75/mt yesterday with the South East Asian port continuing to see higher prices. Tuesday's spread reflected a rebound from the $15.75/mt spread between the two ports seen a week ago.
Paul Hickin, director, EMEA oil news & analysis at Platts explains the importance of buffers and spare storage capacity in global oil markets amid geopolitical uncertainty
Concerns over oil demand growth, stubborn stock levels and strong US supply have emboldened OPEC and its allies to keep cutting output. But the risk of miscalculation and significant disruption in the Middle East, sanctions on Venezuela and geopolitical uncertainties in countries such as Libya and Nigeria have raised the stakes for security of supply. OPEC's growing spare capacity in particular, along with strategic stocks, should provide an extra layer of comfort.
When a market is experiencing a dramatic surplus of inventories, political risks to supply tend to be less relevant to or supportive of oil prices. This was the case during the oil price collapse from 2014-2016, when political risks to supply appeared to have had a relatively muted impact on oil prices, with fundamentals trumping politics as prices fell to below $30 a barrel from over $100/b amid a market flooded with OPEC crude. This helps to explain why the market has moved little on a spate of incidents this year around the Strait of Hormuz, a key shipping and oil artery.
But with US supply growth having stalled, albeit at around 12 million b/d and OPEC and Russia and its alliance determined to bring down stocks via its 1.2 million b/d agreement through to the end of the first quarter of 2020, the oil market could become more exposed to geopolitical upheaval.
A prolonged supply disruption amid depleted commercial oil stocks would see the market hone in on spare capacity - the ability to bring regular barrels to the market for a sustained period of time - for reassurance. Spare capacity is the most effective and dependable area from which markets can bring sustainable production volumes online to replace supply disruptions elsewhere. Spare capacity played a significant role in stabilising oil markets during previous periods of major supply outages, such as 1979 and 1990, with the Iranian Revolution and Gulf War respectively.
The question is whether there is sufficient 'swing' production. The International Energy Agency estimates OPEC had some 3.16 million b/d of spare production capacity available in the second quarter (stripping out Iran), with more than 2 million b/d of that held by Saudi Arabia. That equates to just over 3% of global demand. While spare capacity is low in the broader scheme of things and leaves the oil market relatively susceptible to an outsized, disruptive, geopolitical event, it has recovered from just 1.91 million b/d in the final quarter of last year. Moreover, Iran has 1.43 million b/d available on top should sanctions end, according to IEA calculations.
Saudi Arabia is well aware of its importance. Its national oil company, Saudi Aramco, said in July it could potentially bring 12 million b/d to the market on a sustained basis having made plans to expand the Marjan and Berri fields, adding 550,000 b/d of Arabian Crude to its capacity. That compares with production of less than 10 million b/d, for many months this year.
The swing producer's mettle was tested late last year, ramping up output to more than 11 million b/d to counter any supply shortfall from Iran sanctions as Brent touched $86/b before waivers granted to eight key consumers of Iran crude led to prices to nosedive to $50/b before the year was out. Some analysts doubt whether Saudi Arabia can go much above 11 million b/d for a lengthy period of time.
There are also strategic and emergency oil stocks – those held in storage by countries for a rainy day – that also act a little like spare capacity but with important differences. Under IEA and EU rules, member countries must maintain emergency stocks of crude oil and/or oil products equal to at least 90 days of net imports or 61 days of consumption, whichever is higher. They were very effective in insulating customers from the 1 million b/d Druzhba pipeline fiasco earlier this year after contaminated crude from Russia meant European buyers had to tap reserves.
The US holds close to 650 million barrels of crude in its emergency fuel storage, known as the Strategic Petroleum Reserve, which can meet the nation's demand for over a month. Two-thirds of this crude is considered to be of a sour viscous grade, ideal for the majority of US refineries and processing plants. Although presidents have the right to tap into the stockpile in cases of 'severe energy supply interruption', its use is tightly regulated.
Key consumers of heavier sourer Middle Eastern crudes India and China have also looked to bolster oil stocks. Indian government officials have said there is an urgent need to seal more deals to lease SPR storage facilities as well as build more strategic reserves capacity. Meanwhile, China has continued to increase its oil buffers and its moves to destock this year has also played a role in keeping a lid on oil prices, analysts have said.
But while emergency oil stocks can provide a temporary buffer to supply disruptions, spare capacity is a more reliable and sustainable cushion. Analysts have noted that storage and stocks do play a role in smoothing the cycle, but there are differences such as the size of spare capacity, how quickly it could become available, and that it can be used as a policy instrument to smooth the impact of disruptions.
The IEA reacted to the latest developments in the Strait of Hormuz over the summer – which transports a fifth of all global petroleum liquids consumption through its waterway – by noting emergency oil stocks can cover supply disruptions for an 'extended period', adding that global oil supply had exceeded demand by 900,000 b/d in the first half of the year and commercial stocks in the OECD countries totalled more than 2.9 billion barrels — higher than the five-year average.
But while the IEA talks up the oil market's buffers - including the emergency stocks, additional supply growth from US shale, Canada, Brazil and elsewhere and growing spare capacity – the market will still react to any supply shock. For example, when the US and IEA acted in coordination to replace disrupted Libyan supply in 2011, the duration of the resulting price relief appeared limited.
The oil market's buffers may well provide the security of supply and the opportunity for OPEC to rebalance the market, but they are not a cure-all for geopolitical risk.
Hickin will be talking more about global supply and demand balances as well as current market structures during the first day of the Tank Storage Asia conference in Singapore on September 25. For more information visit www.tankstorageasia.com.
Eni has completed the acquisition of a 20% equity interest in ADNOC Refining, increasing the company's refining capacity by 35%.
ADNOC Refining refines more than 922,000 barrels per day of crude at its Ruwais and Abu Dhabi based refineries. The transaction is one of the world's largest-ever in the refining business and reflects the sale, quality and growth potential of ADNOC's refining assets.
Ruwais is the fourth biggest single-site refinery in the world and is the focus of further expansion and integration to develop the world's largest single-site refining and petrochemicals complex.
The final cash price is $3.24 billion.
Additionally, Eni, ADNOC and Austria's OMV have incorporated a new trading joint venture at Abu Dhabi Global Market, with the same shareholding as in ADNOC Refining. Trading is expected to begin in 2020 when all necessary processes, procedures and systems are in place. Eni and OMV will provide ADNOC with know-how, operational experience and support to accelerate the development of the trading joint venture, enabling ADNOC and its partners to optimise their systems and better manage their international product flows.
With this transaction, Eni enters the UAE downstream sector and increases it global refining capacity by 35%. It follows the company's strategy of making Eni's overall portfolio more geographically diversified and more balanced along the value chain.
Enterprise Products Partners and Chevron USA have signed long-term agreements supporting the development of Enterprise's Sea Port Oil Terminal in the Gulf of Mexico.
The SPOT project comprises onshore and offshore facilities, including a fixed platform located 30 nautical miles off the Brazoria County, Texas, coast in 115 feet of water. SPOT is designed to load VLCCs at rates of around 85,000 barrels per hour, or two million barrels per day. The SPOT design also meets or exceeds federal requirements and, unlike existing and other proposed offshore terminals, is designed with a vapour control system to minimise emissions.
The long-term agreements with Chevron support Enterprise's final investment decision. The construction of the facility is subject to the required approvals and licenses from the federal Maritime Administration, which is currently reviewing the SPOT application.
A.J. 'Jim' Teague, CEO of Enterprise's general partner, says: 'We are very pleased to announce these agreements with Chevron. As a result, we are announcing our final investment decision for our offshore crude oil terminal, subject to government approvals.
'The SPOT facility provides opportunity to significantly expand our export capacity and access multiple market centers as we increase our crude oil produced out of the Permian,' adds George Wall, president of Chevron Supply and Trading.
As domestic crude oil and NGL production continues to outstrip US demand and marine terminals approach full utilisation, projects like SPOT and the expansion of Enterprise's LPG, ethane and petrochemical capabilities will be essential to balancing the market and meeting global demand for US production.
Vopak has announced plans to expand its Deer Park chemical terminal in Houston and its terminal in Australia.
The storage operator will expand its Deer Park facility in the port of Houston, US with an additional 33,000 m3 of chemical storage, which is expected to be commissioned in the second quarter of 2021. The company is also adding 105,000 m3 of storage at its terminal in Sydney, Australia, to cater for demand for clean petroleum products and aviation fuels. This capacity is expected to be commissioned in the second quarter of 2021.
Additionally, Vopak has acquired a 10.7% equity share in Hydroenious LOHC Technologies, which develops innovative technology to allow for safe and cost-effective logistics of hydrogen. The combination of Vopak's terminal network with the liquid organic hydrogen carrier technology has the potential to create a breakthrough in the storage and transportation of renewable energies.
In its half year 2019 financials, Vopak's EBITDA increased by €52 million and reported occupancy rates of 85%, which reflects planned temporary conversion activities related to IMO 2020 readiness and ongoing market conditions at oil hub terminals, whereas other market segments remained solid.
Looking ahead, the company's expansion programme will add 3.2 million m3 in 2018 and 2019, of which 2.1 million m3 was commissioned up to the end of June 2019. Fuel oil capacity conversions for the IMO 2020 bunker fuel regulations are progressing well and will support new market requirements as from the fourth quarter of 2019.
CEO Eelco Hoekstra says: 'The first half of 2019 was important as we have taken further steps in the delivery of our strategy and the alignment of our portfolio based on long-term market developments.
'We have taken significant new capacity into operations to meet new customers demand. Together with our partners we fully commissioned the industrial terminal PT2SB in Malaysia and celebrated the opening of the LPG export terminal in RIPET in Canada. In addition, we expanded our share in the LNG import terminal in Pakistan.
''The divestment of some of our European assets will, after completion, shift our portfolio further towards industrial, chemical and gas terminals. We aim to grow our portfolio in line with market developments and expect our growth investment momentum in 2019 to continue in 20202. Looking further ahead, we continue to explore opportunities in new energies and have today announced our first investment to facilitate the development of hydrogen logistics.
'Our digital transformation is progressing well with the global roll-out of our cloud-based digital terminal management system and we have made excellent progress with our new business development projects.'