Fujairah Oil Terminal receives first cargo

Fujairah Oil Terminal, a joint-venture storage facility, received its first cargo of light distillates and will get an initial crude delivery this month, said Malek Azizeh, the commercial manager.

The start of operations makes the terminal the first storage facility in the Port of Fujairah with crude tanks available for lease, Mr Azizeh said.

The state-owned Abu Dhabi National Oil Company (Adnoc) has a crude storage site in Fujairah for its own use.

Fujairah is nestled between the country’s Indian Ocean coast and the Hajar Mountains and lies outside the Strait of Hormuz at the mouth of the Arabian Gulf.

Abu Dhabi started a crude pipeline to Fujairah in 2012 to allow for exports to circumvent the Hormuz shipping chokepoint and reduce shipment times to Asia.

“Fujairah makes sense geographically because it gives access to markets and cuts the distance for shipments,” Chris Gunson, an Abu Dhabi-based energy lawyer at Pillsbury Winthrop Shaw Pittman, said.

“There’s more potential for growth as storage capacity gives traders more flexibility.”

A contango structure in oil prices has encouraged traders to store crude on the anticipation of selling material later at a higher price. Storage tanks can also blend different refined products to match fuel specifications for different markets.

The Fujairah Oil Terminal has capacity to store 1.18 million cubic metres of crude, fuel oil, gasoil and petrol, according to its website.

The venture is 50 per cent owned by Sinopec Kantons Holdings, with the rest shared between Singapore-based Concorde Energy Group and Fujairah.

The facility completed loading the cargo of about 45,000 metric tonnes of light distillates n Wednesday night, Mr Azizeh said. That equates to about 60,000 cubic metres of storage volume, he said.

Light distillates include transport fuel such as petrol, or naphtha, which can be used in chemical plants.

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