Fujairah Oil Terminal first major expansion since 2015

Fujairah Oil Terminal, the largest independent storage terminal at the Port of Fujairah by throughput, has begun a $45 million project to connect its crude oil tanks to the port’s VLCC loading facility via the Matrix Manifold 2 and to Abu Dhabi National Oil Co’s ADCOP pipeline, in a bet on a surge in oil trading from the newly started Murban futures on the ICE Futures Abu Dhabi exchange.

The project will add four pipelines of 3 km each — two for crude, one for black products and one for clean — and associated pumping capacity, with completion targeted for Q1 2023, Dave Noakes, senior managing director at Prostar Capital, which owns 40 percent of FOT, said.

“Completion of the VLCC Project will allow FOT to fully leverage the new ICE Murban futures,” Noakes, who is also an FOT director, said. “Connection to the VLCC berth is highly attractive to crude customers, as it reduces transportation costs by enabling them to utilise VLCC vessels. Connection to the ADCOP pipeline provides FOT access to customers trading Murban crude, increasing FOT’s customer base.”

The ADCOP pipeline is currently being connected to the port’s Matrix Manifold 2, which will be the basis of linking the ADCOP pipeline to FOT, Noakes said. The MM2 is port infrastructure that connects storage terminals to berths and other storage terminals.

ADNOC on March 29 started a new exchange called ICE Futures Abu Dhabi, where the Murban futures contract trade, a move that may create a new oil benchmark and boost crude exports from Fujairah. Through IFAD, delivery of Murban — ADNOC’s flagship crude that accounts for nearly half of its production capacity of 4 million b/d — can take place in Fujairah, where most Murban volumes are already exported from.

FOT had a throughput of 20 million mt last year, or 29 percent of the port’s total, and about 12 percent of the Fujairah storage market, according to Prostar. Prostar owns 40 percent of FOT, Sinomart Kantons has 50 percent and the Fujairah Petrochem Co 10 percent.

“This is the first major expansion at FOT since commencement of operations in 2015 and reflects the expected strong crude storage demand in Fujairah with the launch of the Murban crude oil futures and the connection of the ADCOP pipeline to Matrix Manifold 2,” Noakes said. Design and construction of the VLCC project has been awarded to Al Banna Engineering & Construction of Dubai.

Established in 2012, Prostar Capital is an SEC registered private investment firm with headquarters in Greenwich, Connecticut, and other offices in Sydney and Hong Kong. FOT is part of Prostar’s portfolio company Global Terminal Investments Ltd., with more than 24 million barrels (3.7 million cm) of bulk liquid storage capacity.

For more information visit www.prostarenergy.com

Source: Tank News International