Fujairah Oil Terminal Invests in VLCC project. Expects Surge in Oil Trade

Friday, August 27, 2021

The Fujairah Oil Terminal is investing an estimated $45 million to upgrade the infrastructure at its storage facilities, betting on a surge in crude trading and storage demand at the United Arab Emirates oil hub, the company's chairman told Reuters.

FOT's expansion, financed by a new $280 million debt facility, will connect its terminal to the Port of Fujairah's very large crude carrier (VLCC) loading facility and the Abu Dhabi Crude Oil Pipeline (ADCOP) pipeline, said Steve Bickerton, senior managing director at Prostar Capital and chairman of FOT.

"That's a game-changer because it gives us access to customers who want to be moving crude oil through VLCCs and it gives our customers direct access to the ADCOP, which brings Abu Dhabi's Murban Crude into Fujairah," said Bickerton.

The project is expected to be completed by the end of next year, Bickerton said.

Abu Dhabi in March launched the Murban crude futures contracts, a physically delivered contract with delivery at Fujairah, offering a rival pricing benchmark and allowing traders to hedge Middle East crude and refining margins.

UAE national oil company ADNOC also plans to boost its output capacity to 5 million barrels per day (bpd) by 2030 from about 4 million bpd now.

"Whilst the port has historically been one of the largest bunker fuel ports in the world, I think we're potentially going to see that being taken over and dwarfed by the crude oil market," said Bickerton.

With the trading and storage opportunities made possible by the Murban oil futures contract, Bickerton added it was "a real possibility" for Prostar to increase its Fujairah crude oil storage capacity through its wholly-owned GTI Fujairah terminal located alongside FOT.

Prostar Capital is a 40% shareholder in FOT with the rest held by Hong Kong-listed Sinopec Kantons (50%) and the Government of Fujairah (10%).

"GTI Fujairah has a large land-bank at the back of the existing terminal and it could build another 500,000 cubic meters of storage on that land and can access the same VLCC connection that we are putting in as part of FOT's program," said Bickerton.

FOT contributed 29% of the Port of Fujairah's 2020 throughput and represents about 12% of the Fujairah storage market, according to Prostar's website. (Reporting by Roslan Khasawneh; editing by David Evans)

Categories: Middle East Coastal/Inland VLCC

Related Stories

Floating Wind and the Taming of Subsea Spaghetti

CNOOC Kicks Off Production from Bohai Bay Field

MCDermott Gets Pipelines and Cables Job at Qatar's Giant Gas Field

Shelf Drilling Finalizes Baltic Rig Sale

PTTEP Sells Its Entire Stake in Deepwater Block Offshore Mexico to Repsol

Saipem Nets $4B for Work at Qatar’s Giant Gas Field

ADES Buys Two Jack-Ups from Vantage Drilling in $190M Deal

Environmental Group Backs Out of Scarborough Litigation

ADNOC Signs LNG Supply Agreement with Osaka Gas for Ruwais LNG Project

Chinese Wind Turbine-makers Move into Europe as Trade Tensions Flare

Current News

Valeura Energy Consolidates Thai Oil and Gas Assets

TotalEnergies Inks 15-Year LNG Supply Deal with China’s Sinopec

Shelf Drilling Secures $200M Contract Extensions with Chevron for Thailand Ops

Floating Wind and the Taming of Subsea Spaghetti

Impending Shortage of Jackups within Ageing Asia Pacific Fleet

Equinor Tries Again for a Japan Offshore Wind Lease

Yinson Production Concludes Minority Stake Sale in FPSO Anna Nery

Sunda Energy Pushes Back Chuditch-2 Appraisal Well Drilling Date

CNOOC Starts Production at Another Oil Field in South China Sea

ABS Takes Charge of Digital Twin Project for Petrobras’ FPSOs

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com