Fujairah — Fujairah, the biggest bunkering hub in the Middle East, is about to reveal plans for new storage and refining projects as it reclaims more land to make way for future demand, an official told S&P Global Platts on Wednesday.
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Fujairah Oil Industry Zone, the authority managing the land used for storage tanks and refining in the UAE emirate, will announce details soon, Captain Salem al-Hamoudi, who is FOIZ director, said in an interview. .
"This year they (new projects) are likely to be more tankage (mixed products and crude) and refinery," he said at the zone's headquarters.
Fujairah, the eastern emirate of the seven-member UAE federation, is capitalizing on its position outside the Strait of Hormuz to attract investments that have typically gone into bunkering operations. Now the emirate wants to boost its profile by adding more refining and crude storage, among other facilities.
For that purpose, FOIZ is expanding available land by about 7% and reclaiming some .66 sq km from the sea in the next 15 to 16 months, which will boost the total area to 10.6 sq km. Around 30% of the reclamation is complete, he said.
"There is room for crude which is partially there," al-Hamoudi said. "Derivatives are there already and we are aiming nowadays for LPG, LNG and petrochemicals as well as adding more refining capacity. This is the basket we are aiming at for the new land."
Currently there are two major refineries in Fujairah, both of which can produce low sulfur fuel oil in compliance with the International Maritime Organization's mandate to have 0.5% sulfur content starting this year from 3.5% previously.
Vitol's refinery has a processing capacity of up to 82,000 b/d. Uniper's facility can refine 67,000 b/d and produce about 3.6 million t/year of marine fuels with sulfur content as low as 0.1%, according to its website.
UAE-based Brooge Petroleum and Gas Investment Co. is building a 24,000 b/d refinery that will produce mainly low-sulfur fuel oil in the first quarter of this year.
The pivot toward cleaner fuels has prompted Fujairah to consider using LNG as bunkering fuel in the future and is talking to various investors about this project, which will be launched once there is a demand for the commodity, al-Hamoudi said.
Currently Fujairah has crude and oil products storage capacity exceeding 10 million cubic meters with plans to reach up to 16 million cubic meters in 2023.
Part of this new capacity will come from Abu Dhabi National Oil Co., the UAE's biggest oil producer pumping some 3 million b/d, which is building the world's largest single-site underground crude storage in Fujairah's mountains adjacent to the port. The caverns will have three compartments; each can hold 14 million barrels.
Now Fujairah would like to replicate this idea and invite other national oil companies to store their crude in the emirate's mountains, according to Captain Mousa Murad, the port's general manager.
"We are thinking about how we are going to sell underground storage in place of tank storage because right now we do not have enough land," Murad said in a separate interview recently.
"The mountains are available especially for big companies. It may also be cheaper and safer."
Besides ADNOC, some of the other big oil companies operating in Fujairah include Saudi Aramco, which opened a trading office in the emirate last year.