RELATED ARTICLESJanuary 2010 - Singapore's independent oil-storage market has not exactly shrugged off the effects of a sharp increase in capacity, at a time of troubled economies worldwide – but its resilience has surprised many, Martin Quinlan writesJanuary 2010 - With the oil market in contango, traders have a strong incentive to put crude and refined products into storage, which is good news for tank-farm operators, writes Anne FeltusJanuary 2010 - Some sectors of the independent oil-storage business at the big ARA ports have felt the effects of the world's economic troubles, but structural changes have helped to maintain utilisation rates, Martin Quinlan writesJanuary 2008 - Operators at the big ARA terminals are benefiting from long-distance trade and new products, Martin Quinlan writes
Independent oil storage: fundamentals help to overcome the fears
The worldwide independent oil-storage business emerges from a testing year in better shape than many had forecast, Martin Quinlan writes
FOR A business earning its revenue by handling flows of refined oil products, a downturn in world oil consumption could have been serious. Despite consolidation, independent storage is still mainly locally based and fragmented, and it becomes highly competitive when capacity is in surplus. Hence the forecasts for trouble as a result of the world's economic difficulties. At some locations, there has been trouble – volumes are down and fees are under pressure. But at the world's main storage locations, serving the main refining centres, business has been buoyed-up by structural changes. Trade between refining hubs, particularly long-haul trade, continues to grow while product specifications continue to proliferate. Traders need tank-space even if they do not utilise all of it. According to the Netherlands' Vopak – the largest international operator in oil storage – for five years the inter-regional trade in oil products has increased by 5% each year. The company says there is a long-term trend for oil products to be made at locations remote from the main markets, so it forecasts continuing growth in demand for tank-space.  Worldwide, the market for independent storage capacity is estimated to total about 220m cubic metres (cm). Despite the mergers and acquisitions of recent years, there are numerous providers of tank-space. Vopak, with a capacity of 28.0m cm, has a share of just under 13% while the number-two operator worldwide, Germany-based Oiltanking, has a capacity of 16.2m cm and a share of just over 7%.
Vopak says its worldwide occupancy rate over the first three quarters of 2009 was 94%, down slightly from the 95% of the same period the previous year. Oiltanking gives a throughput figure of 123m tonnes for 2008, up from 116m tonnes the previous year. Vopak has expansions under construction that will raise its capacity by 2.9m cm, or 10%, by 2011. Oiltanking has 2.7m cm of additional capacity under construction, to raise its total by 17%. Evidence that 2009 was not such a bad year comes from Vopak's results for the first nine months. Operating profits excluding exceptional items were €288.4m ($435.5m), up by 21.4% from the €237.6m of the first nine months of the previous year. In the third quarter, profits were up by 29.0% compared with third-quarter 2008, giving hope that the economic recovery was developing. Oiltanking is, with the oil-trading company, Mabanaft, part of Marquard & Bahls, which does not publish quarterly figures. Marquard & Bahls reported a net income of €106.2m for 2008, sharply down from the previous year's exceptionally high figure of €304.7m. In 2006, the company reported €151.1m. Click here for a review of the Singapore market Click here for a review of the European market Click here for a review of the US Market
|
