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VTT Vasiliko Ltd. and J&P Group have announced the signing of a strategic cooperation agreement for the construction of an oil storage terminal at Vasilikos with an investment of 220 million euros that is set to turn Cyprus into an energy trading hub.

The construction of the terminal is expected to begin in two weeks and to be completed in 2014. During the first phase, the terminal will have a capacity of 357,000 cubic metres (cbm) of oil products (Gasoline, Diesel, Jet fuel, Gasoil, MTBE), which will reach 643,000 cbm with the completion of the second phase.

Within the framework of the project, a marine jetty with four berths will be created. The jetty will extend off-shore 1200m and will include two loading arms per berth per product, capable of loading / discharging 1250 cbm/hour per product.

During the signing session, George Papanastasiou, Managing Director of VTT Vasiliko Ltd, said: "This is an investment of huge importance, which will make Cyprus a transit centre of energy products trading, through the import, export and trans-shipment of oil products from / to the international market. At the same time, trade with the East Med and European markets will be developed and partnerships to provide storage options for the inland market and strategic stock obligations will also be possible. In addition, the project will boost confidence for foreign direct investment and commercial activities in Cyprus."

The General Manager of J&P, Efthyvoulos Iacovides, said: "This project is unique for Cyprus and requires specialization, expertise and execution capability. J&P, with its experience in projects of similar complexity around the world, will begin the project immediately and will complete it within the deadline of the agreement, the first phase in 24 months and the second in 26,5 months."

Through the terminal's activities, it is estimated that Cyprus will gain revenues of 18 million euros per year from port fees, while the state will have additional proceeds from taxes paid by companies trading products via the facility.

VTT Vasiliko Ltd is a subsidiary of VTTI B.V. VTTI’s shareholders are the Dutch energy giant Vitol, one of the world’s largest energy trading companies, and MISC, a shipping company owned by the state oil company Petronas.