Bunkering Facilities, Storage Set to Grow in Fujairah

Vopak Horizon Fujairah is expanding

Low oil prices are spurring investment in bunkering facilities and storage in Fujairah, but the Port of Fujairah favours higher throughput crude oil capacity, UAE media reports.

"In the current environment, it is attractive for people to buy oil at very low prices and then store it in the hope that prices will recover," said Vince Cook, CEO of National Bank of Fujairah.

"Therefore the demand for bunkering and storage facilities is very high right now."

A host of tank storage projects and companies such as Fujairah Oil Terminal FZC, VTTI and Vopak Horizon Fujairah are said to be set to bring millions of cubic metres (cbm) of capacity online in the near term.

Among those looking to increase capacity GPS Chemoil, a joint venture between the Singapore-listed bunker trader and supplier Chemoil Energy and Gulf Petroleum Supplies, is said to be considering adding between 200,000 cbm and 300,000 cbm of capacity to its existing 700,000 cbm facility.

"Fujairah's location has a huge impact there," said Dhananjoy Mishra, terminal manager of GPS Chemoil.

"You can see up to 2020-25 the demand is shifting toward the Far East and South East, and all the cargo will move towards that side."

But the Port of Fujairah is said to favour crude oil storage capacity first and foremost as it will bring in most revenue.

"We have a limit on land," said Salem Khalil, a technical adviser to the Government of Fujairah.

"The priority for this land will be given to crude oil storage because crude oil produces more throughput which helps the port recover investments."

Earlier this month, the Port of Fujairah said it expects capacity for tank storage of crude oil and petroleum products to grow by 75 percent by 2020.