The company planning to build a €220 million private oil storage terminal at Vassiliko yesterday signed a strategic cooperation agreement for its construction with a Cypriot contractor, launching the first phase of a project aiming to make Cyprus an energy hub.
VTT Vasiliko Ltd and J&P Group yesterday announced the signing of the agreement for the construction of the oil storage terminal at Vassiliko, with work expected to begin in two weeks and completed in 2014.
For the first phase of the project, the terminal will have a capacity of 357,000m3of oil products (petrol, diesel, jet fuel, gasoil, MTBE), reaching 643,000m3 with the completion of the second phase.
In addition, a marine jetty with four berths will be created. The jetty will extend offshore 1,200m and will include two loading arms per berth per product, capable of loading / discharging 1250 m³/h per product.
MD of VTT Vasiliko George Papanastasiou says: ‘This is an investment of huge importance, which will make Cyprus a transit centre of energy products trading, through the import, export and trans-shipment of oil products from / to the international market.
‘At the same time, trade with the East Med and European markets will be developed and partnerships to provide storage options for the inland market and strategic stock obligations will also be possible,’ he said, adding ‘the project will boost confidence for foreign direct investment and commercial activities in Cyprus’.
The construction of the oil terminal is estimated to create more than 600 new jobs within 2012, and another 60 people from Cyprus will be employed to operate and maintain it. Additional jobs will be created in service provision to support terminal and shipping activities.
J&P General Manager Efthyvoulos Iacovides, said the project was unique for Cyprus and requires specialisation, expertise and execution capability.
‘J&P, with its experience in projects of similar complexity around the world, will begin the project immediately and will complete it within the deadline of the agreement, the first phase in 24 months and the second in 26.5 months,’ he said.
Iacovides noted that the experience gained in Cyprus would help towards preparing Cyprus for the infrastructure needed to deal with the discovery and exploitation of natural gas in Cyprus’ offshore fields.
According to a VTT statement, through the terminal’s operation Cyprus is estimated to gain revenues of €18 million per year from port fees, while the state will have additional proceeds from taxes paid by companies which will trade their products via the terminal.
Last November, VTT Vasiliko said it would take a positive view if the state wished to use its facilities, which could save up to €50 million in investment for the Republic of Cyprus.
It also said the VTT Vasiliko terminal could be expanded easily to provide the capacity to store Cyprus’ strategic stocks, which would save Cyprus more than €17 million per year, ‘which to date the Republic of Cyprus is obliged, based on the European acquis, to spend renting storage space abroad’.
VTT Vasiliko is a company registered in Cyprus, a subsidiary of VTTI B.V.
With interests spanning over 11 countries and 5 continents, VTTI is considered one of the top ten independent oil terminal operators in the world. Major terminals are located in Amsterdam and Rotterdam in the Netherlands, Fujairah in the UAE and Port Canaveral, Florida, USA.
VTTI’s shareholders are the Dutch energy giant Vitol, one of the world’s largest energy trading companies, and MISC, a leading international shipping company, registered in the Malaysian stock market and owned by the state oil company Petronas.