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UAE's BPGIC secures land to more than triple its Fujairah oil storage capacity

Highlights

Brooge Petroleum and Gas Investment Company, a UAE-based oil storage and refining company, said Thursday it secured more land in Fujairah to more than triple its storage capacity in the eastern emirate, which is capitalizing on its location outside the Strait of Hormuz to build a storage and bunkering hub.

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BPGIC has secured an initial lease agreement for land in Fujairah that will help carry out its phase III storage expansion and build the remaining 90% of a 250,000 b/d greenfield refinery, the company said in a statement on Thursday. The first 24,000 b/d phase of the refinery is being built in an adjacent location and is set to be finished in the first quarter of 2020. The company didn't say how much extra land it intends to lease.

"BPGIC expects that phase III alone could add storage and services capacity of three and half (3.5) times, or 3.5 million cubic meters, the size of BPGIC's projected operations post-phase II, which will be 1 million cubic meters," the company said.

BPGIC currently has 400,000 cu m of crude oil products storage and is constructing an additional 600,000 cu m of storage space in its phase II expansion to hold mainly crude. That project is set to be completed by the second or third quarter of next year.

"BPGIC believes it could execute a final lease agreement, which would permit commencing plans and construction, for this land sometime in 2019," the company said. "Concurrently, BPGIC has had discussions with top global oil majors, which have expressed interest in securing portions of the capacity of a phase III facility."

BPGIC's refinery will be the third in Fujairah, after Vitol and Uniper.

The company is in the midst of a reverse merger with Nasdaq-listed Twelve Seas Investment Co, intended to give BPGIC access to capital markets to further its expansion plans. The deal, which is set to be completed this year, would value the company at $1 billion.

Fujairah expects its total 10.5 million cu m of storage capacity -- including oil products -- to rise by around 75% by 2022 as state-run Abu Dhabi National Oil Co. and other independent oil storage companies expand their facilities, Martijn Heijboer, business development manager at the Fujairah port, said in April.

--Dania Saadi, dania.el.saadi@spglobal.com

--Edited by Claudia Carpenter, claudia.carpenter@spglobal.com