Despite storage tanks brimming to capacity with crude the international market is unlikely to run out of storage as salt caverns offer an alternative solution.
Storage in key trading hubs such as Singapore, northwest Europe and South Africa has been rapidly filling over the past year.
In an interview with Reuters, Rob Nijst, chief executive of VTTI, says that while the oil price decline has proved to be a bright spot for operators thanks to producers and traders renting tanks, underground caverns in Europe and Asia could offer an alternative solution.
‘Everyone wants more storage volumes at the moment,’ Nijst told Reuters.
As previously reported on Tank Storage Magazine, land scarcity in Singapore is driving more crude to be stored in underground storage caverns. Tan Wooi Leong, of Jurong Consultants, says that these caverns allow for large-scale storage of crude oil and other products which in turn allows land in Singapore to be used in other ways.
Jared Pearl, chief commercial officer at VTTI, adds that the price volatility has been a good change.
VTTI plans to further expand its operations into Africa in addition to its 170,000 m3 terminal in Cape Town.
Pearl adds that a large majority of the company’s growth and acquisitions will be non-hub related.
In August, Vitol acquired MISC Bhd’s 50% share in VTTI for $830 million. At the time Vitol already owned 50% of VTTI BV.