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The State Oil Company of Azerbaijan Republic (SOCAR) has announced that it has entered into an agreement with privately-owned Swiss trading house Aurora Progress to collaborate in the development of oil storage facilities, including a new oil terminal being built in Fujairah.

SOCAR will be represented in the partnership through SOCAR Trading. It is understood that the state oil company is keen to build a strong asset base that can contribute to the development of its international and downstream operations.

"There is a deficit of oil products. It's a growing market and we are ready to expand to it. So, we will need to have storage capacities here," an unnamed SOCAR official is reported to have told Reuters.

The facility, named Aurora Fujairah Terminal, will have a total storage capacity of 644,000 cubic meters across 20 tanks and will be used for the storage, blending, and resupply of fuel oils, gasolines, naphthas and middle distillates (diesel, gasoil & jet kerosene).

As a result of the new agreement, the facility will be managed by a joint company named SOCAR AURORA, which will offer storage capacity to third parties.

The first phase of the terminal is expected to be operational by the beginning of 2011.

The Port of Fujairah is commissioning this year a new multi berth facility for the receipt and loading of oil tankers. The SOCAR AURORA terminal will be one of the first to make use of this new vessel handling capacity at the Middle East energy hub.

Aurora announced the start of civil works on the terminal earlier this year after signing agreements with the Municipality of Fujairah and the Port of Fujairah.

Commenting on the project in February, Aurora's Trading Director Ammar Kutait said: "There is a lot of demand for storage in the region and with our new state of the art terminal and flexible berthing facilities in the port we can offer our customers a first rate service in this growth market."

Aurora Progress S.A. is a privately owned Swiss based company with the trade, supply, transport and storage of refined petroleum products as its core activities.

The group's roots go back to 1978 when Petrotex S.A. was first established. After acquiring Petrotex S.A and its subsidiaries, Aurora Progress continued to expand, becoming a global trading company.

Today the group's main trading arm Aurora Petroleum Trading & Supply S.A. is involved in the trading and supplying of petroleum products and the supply of marine fuel in ports around the world.