UK-based energy company BP will expand its Singapore fuel oil storage capacity to 600,000cm.
The company has reached an initial agreement with Universal Terminal in Singapore to take up 250,000-300,000cm to store the utility and marine fuel in Asia's trading centre by Q1 2008.
BP has agreed to take up the tanks, but a deal has yet to be signed. The company is taking up extra storage to maintain its competitive advantage in the market.
Other major players will also bump up capacities – the oil storage sector will see an additional 4 million cm by the end of the first quarter.
BP has approximately half the total fuel oil capacity at the Tankstore terminal in Singapore, which it shares with Singapore blending firm Kuo Oil.
Hin Leong, Shell and Glencore, as well as PetroChina and Russian trader Gunvor, are also tenants at Universal, the largest terminal in Asia, which will have a 2.3 million cm capacity when completed in Q1 2008.
By the end of the first quarter, total capacity in Singapore will be about 10 million cm, up from the current 5.8 million cm.
Universal Terminal is the only facility in Asia that can berth two fully-laden Very Large Crude Carriers (VLCCs). BP regularly uses VLCCs to transport oil to east Asia and conduct lightering operations off Singapore, transferring cargoes to smaller tankers before delivering them into its onshore tanks.
Following the explosion at BP's Texas refinery in 2005 killing 15 people and injuring 170, BP has been fined $50 million. The company also polluted a lake and land in Alaska after two oil leaks from the pipeline in March and August 2006.
BP has been fined a total of $373 million (260 million) by the US Department of Justice for environmental crimes and committing fraud. That sum is the highest fine of its kind levied under the Clean Air Act.
'The tragic explosion at the Texas city refinery and the pipeline leaks in Alaska were sad reminders that our environmental laws exist both to protect the lives and safety of the public, and also to preserve our natural resources,' acting Attorney General Peter Keisler, states.
The largest singular fine amounts to $303 million relating to a price manipulation scam between April 2003 and February 2004, over which four ex-BP workers have been indicted. The fine refers to price-fixing charges for manipulating the propane market in 2004. It marks a record fine imposed by the Commodity Futures Trading Commission (CFTC) for market manipulation.
BP will be monitored by an independent body for three years to ensure that it is complying with the terms of the agreement made on 25 October.
'These agreements are an admission that, in these instances, our operations failed to meet our own standards and the requirements of the law. For that, we apologise,' BP America chairman Bob Malone says.
BP has already spent $1.6 billion in compensation to victims of the Texas disaster, and has settled more than 1,600 personal injury claims.
Earlier in the week the oil giant announced that quarterly profits slumped by 45% after problems at its production and refinery businesses. Profits at BP fell to $3.88 billion for the three months to the end of September from $6.98 billion a year earlier.
