Latest storage news
Runeel Daliah, analyst at Lux Research examines why the industrial sector is driving hydrogen technology innovation and the crucial role the storage sector will play as this economy evolves
The ongoing transition from fossil fuels to renewable energy has raised the level of interest and investment in renewable hydrogen.
To date, much attention is focused on fuel cell technology and the transportation sector, but it must be remembered that hydrogen is, first and foremost, an essential feedstock for the industrial sector. Most of the hydrogen produced globally today is consumed by the chemicals and refining industry, and only a very small portion is used in transportation. Given its immense footprint in industry, it stands to reason that the industrial sector, and not the transportation sector, should be the bedrock for hydrogen technology innovation.
The industrial sector has a different set of priorities when it comes to hydrogen technology development. In transportation, innovation interest focuses at the point of use, i.e. fuel cells. In industry, innovation lies at the point of production, in this case steam methane reforming or water electrolysis. Both technologies are at commercial scale, but steam methane reforming dominates the market, as it is the more scalable and cheaper option for hydrogen production. However, trends in the energy transition are starting to impact the industrial sector, and this is where water electrolysis technology becomes crucial.
Unlike power generation and the transportation industry, the industrial sector has largely been insulated from regulatory policies aimed at limiting greenhouse gas (GHG) emissions, which is incongruous given that the industry contributes 21% of global CO2 emissions. Since the 2015 Paris agreement, the sector has found itself under increasing pressure to innovate toward low-carbon technologies.
Decarbonising the industrial sector, however, is no easy task. Unlike power generation and transportation, where the end goal has always been to completely remove carbon from the equation, this is not possible in the chemicals sector, as carbon is an essential building block in many chemicals; a molecule of methanol will always contain one carbon atom. This is why the chemical industry is deeply entrenched with the oil and gas sector, the source of carbon feedstock worldwide, and decoupling the two sectors from each other was, until recently, deemed implausible. However, action is being taken to do so, and it is primarily driven by the energy transition of the power generation sector.
The adoption of renewable electricity is growing and primarily driven by zero-emissions solar photovoltaics and wind turbines. This influx of renewable electricity onto the grid changes the outlook for water electrolysis. Using renewable electricity to generate hydrogen from water electrolysis eliminates all CO2 emissions and provides the chemicals sector with a zero-carbon hydrogen feedstock. Combined with emerging technologies such as direct air capture for non-fossil carbon feedstock, it allows the chemicals sector to completely decouple itself from the oil & gas industry. This is why interest and investments in industrial applications of water electrolysis continue to grow. Just as the lithium-ion battery acts as a bridge between the power generation and transportation sectors, water electrolysis can act as a bridge between the power generation and chemicals sectors.
Despite all this activity, there are still challenges for hydrogen innovation in the industrial sector. First, there is no regulatory framework that currently supports the adoption of low-carbon technologies, including water electrolysis, in the industry. This means that water electrolysis projects will compete head-on with fossil-based technologies on a cost basis. Second, the cost of hydrogen production from water electrolysis today is simply too high compared to natural gas reforming, and access to very cheap renewable electricity is crucial. Third, and perhaps most importantly, there is still no widespread infrastructure for hydrogen storage and distribution. This challenge is not yet consequential as hydrogen used in industry is mostly generated on-site and used immediately; however, for renewable hydrogen to seamlessly penetrate the global industrial sector, hydrogen will have to be generated in locations with access to cheap renewable electricity and transported to industrial clusters worldwide. This requires an international distribution and storage network for hydrogen, which does not exist today.
Compression remains the incumbent method for hydrogen storage and transport, but it is not suitable for international distribution. Emerging methods such as liquefaction, physical adsorption on solid material, and chemical bonding in synthetic hydrocarbons or liquid organic carriers provide higher volumetric storage capacities and are fast gaining traction in industry. There will be no winning option – the choice of a storage and distribution medium for hydrogen will be dependent on cost, location, transport distance, and safety requirements. While it is too early to predict what the ideal mix of storage and distribution technologies will be, one thing is sure - as the hydrogen economy evolves, engineering companies active in gas storage and shipping will have a crucial role to play.
Harshit Sharma, oil & gas expert, Lux Research, will be talking more about the role hydrogen will play in the industrial sector in a decarbonised future on the second day of the Tank Storage Asia conference on September 25 & 26. For more information visit www.tankstorageasia.com.
Stena Oil is expanding storage capacity for 0.5% sulphur fuel oil in the Port of Gothenburg as it start supplying low sulphur fuel oil.
The company is adding 25,000 m3 of storage as well as boosting delivery capacity with a newbuild tankers of 5600 DWT, which it will take delivery of in March 2020. The 0.5% suphur fuel oil is available by barge in the new Skaw-Gothenburg range.
Additionally, the company's new storage terminal in Frederikshavn will be completed in the fourth quarter of 2020. The new terminal will be Scandinavia's largest for marine fuel products and will have a capacity of 75,000 m3 and is located close to one of the busiest shipping lanes in Europe.
The company says in a statement: 'We look forward to a growing bunker market in our region and these projects will further support our growth. We have been a very active player in the ULSFO 0.1% market since 2015 and building on this experience, customers can turn to us with confidence for their VLSFO needs going into 2020.'
Martin Midstream Partners has sold its East Texas Pipeline for $17.5 million to an undisclosed buyer.
The pipeline has been idle since September 2018 and was producing a trailing 12-month net loss and negative EBITDA of $1.6 million and $0.9 million respectively.
The net proceeds will be used to reduce outstanding borrowings under the partnership's revolving credit facility.
Ruben Martin, president and CEO of Martin Midstream, says: 'The East Texas Pipeline sale is one more step along the partnership's strategic path of selling non-core assets and using the proceeds to reduce leverage.'
Kinder Morgan has announced a $170 million improvement programme to increase efficiency, add product liquidity and enhance blending capabilities at its Pasadena and Galena Park terminals.
The company will invest $125 million on enhancements to its Pasadena Terminal and Jefferson Street Truck Rake, including:
- Increased flow rates on inbound pipeline connections and outbound dock lines, significantly reducing vessel load times and expanding effective dock capacity
- Tank modifications that will provide for butane blending and vapour combustion capabilities on 10 storage tanks, with the option to extend those capabilities to an additional 25 tanks or more
- Expansion of the current methyl tert-butyl ether storage and blending platform, including a dedicated cross-channel MTBE line serving vessels being loaded at Pasadena's North Docks
- A new, dedicated natural gasoline inbound connection, enhancing customers' blendstock supply optionality and liquidity
The improvements, which are expected to be completed by the end of the second quarter of 2020, are supported by a long-term agreement with a major refiner for two million barrels of refined petroleum products storage capacity at the terminal.
Additionally, the company will invest more than $45 million to develop and construct a butane-on-demand blending system for 25 tanks at its Galena Park Terminal. This will include construction of a 30,000-barrel butane sphere, a new inbound C4 pipeline connection, as well as tank and piping modifications to extend butane blending capabilities to 25 tanks, two ship docks and six-cross channel pipelines.
The project is supported by a long-term agreement with an investment grade midstream company and is expected to be completed in the fourth quarter of 2020.
John Schlosser, president of terminals for Kinder Morgan, says: 'These projects speak to Kinder Morgan's continued commitment to excellence and to improving our already best-in-class facilities along the Houston Ship Channel.
'The announced improvements only serve to enhance our position as the market-leading refined petroleum products storage hub on the US Gulf Coast. This offers our customers unmatched supply optionality and liquidity and modal efficiencies as they aim to maximise storage and blending economics and access domestic and global energy markets in the most cost-effective manner possible.'
The most prominent challenges, developments and solutions in the Asian bulk liquid storage industry will be discussed and debated at Tank Storage Asia's conference.
Innovation, regulation and safety are the key themes that will be discussed during the two-day conference and exhibition when it returns to Singapore's Marina Bay Sands Expo & Convention Centre on September 25 & 26.
This year's event will champion innovation, with several seminars hosted by leading industry experts set to discuss the latest technological developments, all accessible to conference delegates only. Mark Lim, commercial manager at Stolthaven Terminals, and Chye Poh Chua, CEO at ShipsFocus, will present a session on big data and artificial intelligence, detailing how technology can be used to reduce tanker waiting times and enhance terminal utilisation. The seminar will promote inclusive growth, encourage marine commerce to digitalise, and help maritime SMEs close the digital divide.
Edwin Ebrahimi, innovation engagement leader at Vopak, will discuss how the storage operator has implemented Lim and Poh Chua's guiding principles to become truly digitalised. IT/OT solutions, including drone inspection technology and robotics for in-service tank inspections, have been used to solve challenges at Vopak's Singapore terminal. The seminar will provide key insights and strategies that attendees can implement in their own organisations to drive digital transformation.
Another key theme at the event is regulation; specifically, IMO 2020. Sushant Gupta, director - Asia-Pacific refining, at Wood Mackenzie, will explain how the legislation represents a positive move to drive down emissions and improve sustainability. He will also answer questions on how the sector will adapt to changes in demand for high and low sulphur fuel oil, and what this means for storage opportunities in Asia.
Paul Hickin, associate director at Platts, will examine how global supply and demand balances for oil will be affected by IMO 2020, and how market dynamics and structures will react. He will also look at OPEC's determination to cut output beyond 2019; a development that Harshit Sharma, oil & gas expert at Lux Research, will also address while debating the role hydrogen will play in a decarbonised future. Sharma will highlight the global energy transition and encourage companies to improve their green credentials by investing in low carbon energy alternatives. Sharma will also discuss characteristics of the new fuels on the market, including marine gasoil (MGO), very low sulphur fuel oil (VLSFO) and liquefied natural gas (LNG). He will also reflect on the commercial opportunities that will present themselves after the introduction of IMO 2020.
Safety is another industry theme that will be explored at Tank Storage Asia. Lai Siang Yeong, asset and operations manager at Oiltanking Asia Pacific, will discuss how the business has focussed on process safety improvement to become compliant with Singapore's Safety Case Regime.
There will also be plenty of opportunities at the event for professionals to network with their peers and share best practice in relation to innovation, regulation, safety and more. An online, one-to-one networking platform will allow visitors to set up meetings with suppliers and prospects and manage their schedule during the event. The TSA Connect Lounge on the exhibition floor will also provide a comfortable space for visitors to host meetings.
Mark Rimmer, Tank Storage portfolio director, says: 'Tank Storage Asia is alert to the biggest issues currently affecting the Asian tank storage industry. The event will examine the trends that are most prevalent in great detail. This is what brings leading professionals to the event, year-on-year.'
Over 80 exhibitors and more than 20 conference speakers, including experts and analysts from top terminals and oil majors, will contribute to the pool of thought-leadership at the show.
For more information on visiting the exhibitor and attending the conference visit www.tankstorageasia.com.
Varo Energy plans to acquire an additional 10% stake in the Bayernoil refinery from co-shareholder BP Europa.
Additionally, Varo will purchase BP's polymer modified bitumen plant located at the Vohburg site with its storage capacity, as well as the 9% stake the company holds in Transalpine Oelleitung, which transports crude oil from the port of Trieste to refineries in Central Europe.
Once the transaction is complete, Varo will hold 55% of the shares in Bayernoil, which has a total refining capacity of 220,000 barrels per day, split between the Vohburg and Neustadt sites. Bayernoil will be jointly managed by its remaining shareholders; Varo, ENI and Rosneft. Once complete, Varo's total refining capacity will increase to 189,000 barrels per day across its two refineries in Cressier, Switzerland and Bayernoil, Germany.
Varo CEO Roger Brown says: 'The Bayernoil refinery is a key strategic asset for Varo's operations in Germany and beyond. Investing in additional shares will offer greater flexibility and help us further optimise our logistics to continue to best serve our customers across multiple borders.'
NGL Energy Partners has signed a definitive agreement to sell TransMontaigne Product Services and associated assets to a strategic buyer for proceeds of $300 million.
The TransMontaigne Product Services (TPSL) makes up a portion of NGL's refined products reporting segment. The divested assets include a terminalling services agreement with TransMontaigne Partners, including the exclusive rights to utlise 18 terminals, line space along Colonial and Plantation Pipelines, two wholly-owned refined product terminals in Georgia and multiple third-party throughput agreements and all associated customer contracts, inventory and working capital.
Mike Krimbill, NGL's CEO, says: 'NGL continues to focus on its core areas where we have competitive strength. These focus areas generate stable and predictable cash flows as we grow our mix of long-term contracted revenues. The sale of TPSL is part of this strategy and a result of the strategic review of the refined products business announced earlier this year.
'Along with the significant reduction in inventory and working capital associated with this business, this transaction reduces borrowings on our working capital revolver and enhances the partnership's liquidity and overall leverage profile.
'Managing our leverage and cost of capital are fundamental to our business strategy as we continue our strategic growth plan while maintaining focus on a strong balance sheet.'
The transaction is expected to close during the second fiscal quarter.
Trafigura has received its first delivery of Permian crude oil from Plains All American's Cactus II pipeline at the Buckeye Texas Partners terminal in Corpus Christi, Texas.
Trafigura and Buckeye have worked together to achieve early service commissioning and receipts prior to full Cactus II operations, through connected infrastructure in the Eagle Ford basin. Further direct connections and interconnectivity, which will provide enhanced service capabilities, will be completed at Buckeye Texas Partners in Corpus Christi once the Cactus II pipeline is fully operational.
The pipeline will have the capacity to deliver more than three million barrels per day into the broader Corpus Christi market.
Corey Pologo, director of Trafigura Trading, North America, says: 'Trafigura has a significant long-term volume commitment to move crude oil from the Permian Basin via Cactus II. This delivery further builds our position as the leading exporter of US crude oil and refined products as we utlise our global customer base and marketing skills to place barrels with end customers cross the world.'
Khalid Muslih, president of global marine terminals for Buckeye, adds: 'Buckeye continues to be at the forefront of developing critical last-mile infrastructure to support growing US crude oil and petroleum product exports. Upon completion of the first phase of development across our South Texas facilities, we will be able to provide customers with access to broader domestic and international markets via our premier outlets offering over one million barrels per day of export services.'
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.