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International oil-storage operators expand on supply trends

The big international independent oil-storage operators are implementing capacity expansions to support the growing long-distance trade in refined products

Independent oil storage operators – the Netherlands’ Vopak and Germany’s Oiltanking are the world’s largest – are positioning for another round of expansion in demand for their services, driven by the growing long-distance trade in refined products. A large volume of new storage capacity is under construction or planned, with Asia the main location.

The independent storage business grew up in the 1970s, in step with the growth in independent trade in refined oil products. Later, new users such as the national oil companies added to demand for capacity. Most recently, the shift from the refining business’s historical centres-of-gravity – the US and western Europe – to Asia is bringing further growth in demand, as increasing volumes of refined products are shipped internationally.

Growth surge

The international operators see that trend as having a long way to run. They are expanding fast, to position for strong demand growth over the coming few years. Vopak, with 27.2 million cubic metres (cm) of storage capacity worldwide, lists new terminals and expansion projects with a capacity of 6.2 million cm as due for completion by the end of 2014. The increase, of 22.8% over existing capacity, makes the growth surge the strongest in recent history. Oiltanking is also implementing several projects, but declined to discuss its plans.

High utilisation rates support the expansions. Vopak says its worldwide occupancy rate averaged 93% over the first nine months of 2011, as it did over the whole of 2010. Oiltanking gives throughput figures: the company said its terminals handled 145.9 million tonnes of liquids in 2010, showing growth from 135.7 million tonnes the previous year and 122.8 million tonnes in 2008.

Vopak’s regional breakdown shows the strength of Asia, where its facilities recorded an occupancy rate of 94% over the first nine months of 2011. Its Europe, Middle East and Africa operations also showed 94% occupancy. In north America, where Vopak is relatively lightly represented, the occupancy rate was 92%. It dipped to 90% in Latin America.

The company’s financial figures for the first nine months also show the importance of Asia to its business. Asian operations accounted for 40.9% of Vopak’s operating profits over the period – and Asia was the only region to show an increase in operating profits, of 16.0%. North American operating profits showed a decline of 29.7%, while the Europe, Middle East and Africa group was down by 4.4%.

Vopak’s operating profits for the first nine months, excluding exceptional items, amounted to €339.2 million ($449.1m), virtually unchanged from the €337.8m of the same period in 2010. Oiltanking is, with the trading company Mabanaft, held by privately owned Marquard & Bahls, which publishes only limited financial information. Marquard & Bahls reported net income of €150.2 million for 2010, up by 12.4% from the €133.6 million of the previous year.

Also in this year's Independent Storage Survey:

Singapore oil-storage demand drives area plans

ARA oil-storage business takes a hit

US oil-storage dips on price trends

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