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Tue 22 Mar 2011, 15:52 GMT

PetroChina eyes Fujairah oil storage - again


Oil giant is reportedly seeking to build storage capacity at the Middle East hub.

PetroChina is seeking to construct up to 1 million cubic meters of storage capacity for refined oil products at the port of Fujairah, Reuters reports.

The Chinese oil firm is understood to be weighing up whether to go into partnership with another company or to construct an oil storage facility on its own at the Middle East hub.

"They [PetroChina] have two options available for them. They can build on their own or they can work with someone else, it's not clear which option they will pick yet," an anonymous source told Reuters.

PetroChina is said to be in talks with the government of Fujairah about building storage capacity at Fujairah.

Vopak Horizon Fujairah, a joint venture between Royal Vopak, Horizon Terminals, the government of Fujairah and Kuwait's Independent Petroleum Group (IPG), has been mentioned as a potential joint venture partner for PetroChina should the company decide to take one on.

Fujairah has emerged as a major storage hub in the Middle East in addition to already being one of the world's leading bunker ports along with Singapore and Rotterdam. The port is set to more than double its storage capacity to over 7 million cubic metres by 2012, from the current 3 million tonnes.

With international oil firms racing to secure precious storage capacity around the world, it is thought that PetroChina will be keen to make a decision fairly soon regarding establishing an oil storage facility in Fujairah.

However, it is not the first time that the company has been linked with Fujairah. In January 2010, a Middle East-based trader was reported to have been approached by PetroChina to discuss the economic feasibility of developing a terminal in the UAE, which Petrochina had already been studying for approximately a year.

Last year the company also launched an energy trading desk in Dubai, following in the footsteps of other international oil firms to have set up trading outposts in the UAE.

The launch of the energy desk and the company's plans to establish storage capacity in the UAE are linked to the recently built crude oil pipeline running from Abu Dhabi to Fujairah, which will allow the world's third largest oil exporter to send approximately 60 percent of its crude exports to Fujairah, thus bypassing the Strait of Hormuz.

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