London — Saudi Aramco is considering acquiring or building oil storage facilities in Fujairah, after announcing last week it was opening a trading office at the strategically located eastern UAE port.
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"Aramco Trading is currently utilizing third-party storage in Fujairah; however we are exploring opportunities for wholly owned and operated Aramco Trading storage facilities there," the Saudi state-owned company told S&P Global Platts in an emailed statement on Sunday.
Apart from Fujairah, which is the world's second largest bunkering port, Aramco also stores crude and refined products in other Middle Eastern facilities like Saudi's Red Sea port of Yanbu and Ain Sukhna as well as Egypt's Sidi Karir.
The Fujairah trading office and expansion plans are part of Aramco's ambitious aim to boost trading volumes to 6 million b/d by next year -- 50% more than in 2018 -- and propel the company into the top tier of global fuel-trading companies.
Aramco, the world's largest crude exporter, has already been trading some 350,000 b/d of gasoline and fuel oil from the port, according to company officials. The new office, dubbed Aramco Trading Fujairah, will handle all gasoline and fuel oil storage and blending activity.
Fujairah has an advantageous location outside the volatile Strait of Hormuz chokepoint that has been a geopolitical flashpoint, though four tankers, including two owned by Saudi Aramco, were attacked just outside the port last month by what investigators from the UAE, Norway and Saudi Arabia said was likely a "state actor" with sophisticated capabilities.
US officials have blamed the attack on Iran, which has denied responsibility, as Washington has ratcheted up its sanctions on Tehran.
Fujairah, on the Gulf of Oman, has expanded its capacity to handle and process some 100 million mt/year of crude oil and petroleum products, and port officials have said they expect its oil storage capacity of about 10.5 million cu m to rise by about 75% by 2022. It is also conducting a feasibility study for LPG storage and is in talks with companies for LNG storage, Martijn Heijboer, Fujairah port's head of business development, told Platts in an interview in April.
Among the major tank operators in Fujairah, Vopak Horizon Fujairah owns about 2.6 million cu m of oil storage, while Vitol owns 1.6 million cu m of storage, as well as a 90% stake in the 80,000 b/d Fujairah Refinery.
Fujairah Oil Terminal FZC owns a 1.2 million cu m oil storage facility, and Brooge Petroleum & Gas Investment Co. has 400,000 cu m of oil products storage and is building an additional 600,000 cu m of capacity for crude oil, along with a 250,000 b/d refinery that it says will begin its first phase of operations by the first quarter of next year.
Fujairah is also the terminus of Abu Dhabi state-owned ADNOC's 360-km (223-mile), 1.8 million b/d pipeline carrying crude from Abu Dhabi to the port for export. In addition, ADNOC is building a 42-million-barrel underground crude storage facility.
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