VTTI Sees Increased Demand for Distillate Storage in SE Asia

VTTI says it has seen an increase in demand for distillate storage in Southeast Asia.

Vitol Tank Terminals International BV (VTTI) says it has seen an increase in demand for distillate storage in Southeast Asia, and is looking for opportunities to expand its storage capacity in the region as a result, Reuters reports.

"There are more people looking for distillates tanks now than a year ago," said Aernout Boot, general manager of VTTI Asia, as well as general manager of ATT Tanjung Bin Sdn Bhd (ATB), VTTI's terminal in Johor, Malaysia.

Boot says the oil industry has absorbed at least 2 million cubic meters (cbm), about 12.6 million barrels, of storage in the past 18 months in Singapore, Malaysia, and Indonesia following record fuel exports from China and a build-up in diesel supplies.

While Southeast Asia is expected to see an increase in oil volumes, Boot explains that selecting the appropriate location for terminal development can pose a challenge, as each country has different regulations, as well as their own state-run and domestic companies.

"People have the idea that Asian economies are all growing so it's a slam dunk to invest in new projects, but that's not really (the case)," said Boot.

"In a lot of countries, it's not easy to say we're an outsider wanting to invest in terminal facilities. There are only a few places that tick the boxes."

Oil volume at the ATB terminal is noted to have grown by 10 percent annually since 2014, with VTTI now said to be looking to add berths to enable traders to increase storage tank turnover oil.

Boot points to strong demand growth for Indian liquefied petroleum gas (LPG) imports as another "huge opportunity," and anticipates storage demand to increase next year when the effects of China's loosened restrictions on oil imports and exports for independent refiners will be felt.

Last year, Ship & Bunker reported that ATB, a wholly owned subsidiary of VTTI, had completed the second phase of the ATB oil terminal expansion, adding another 262,000 million cbm of storage capacity to the existing facility.