Shell, Vi­tol boost UAE stor­age to han­dle Iraqi crude

Kuwait Times - - BUSINESS -

Royal Dutch Shell and trad­ing house Vi­tol are step­ping up their op­er­a­tions in the port of Fu­jairah to store Iraqi crude as pro­duc­tion from the OPEC mem­ber rises, in­dus­try sources said.

Iraq is OPEC’s sec­ond largest pro­ducer af­ter Saudi Ara­bia and its out­put has al­most dou­bled since the start of the decade at 4.7 mil­lion bar­rels per day (bpd). With a tar­get of 5.5-6 mil­lion bpd by 2020, Iraq wants to be ex­empt from the car­tel’s bid to boost oil prices with pro­duc­tion cuts to re­duce a global sur­plus.

Lo­cated on the east coast of the United Arab Emi­rates at the en­trance to the Strait of Hor­muz, Fu­jairah is one of two ma­jor ports in the re­gion along with Oman’s So­har and is a busy re­fu­elling point for tankers tak­ing crude on long voy­ages out of the Gulf.

The emirate is keen to boost its sta­tus as a global trad­ing hub by in­creas­ing its port stor­age ca­pac­ity from 10 mil­lion cu­bic me­tres to 14 mil­lion cu­bic me­ters by 2020. Tra­di­tion­ally, it fo­cused on fuel to power tankers and re­fined oil prod­ucts.

Shell leased five large crude stor­age tanks at the port last year to take ad­van­tage of low oil prices for the play, in­dus­try and trad­ing sources said. Shell is an eq­uity part­ner in Iraq’s Ma­jnoon oil­field.

“The stor­age tanks were built specif­i­cally ac­cord­ing to Shell’s re­quire­ments,” a trad­ing source in Fu­jairah said. “Shell wanted to avoid any fluc­tu­a­tions in pro­duc­tion out of Iraq. So far they are the only ones who have a con­tract with (stor­age com­pany) Vopak to bring crude us­ing the new jetty,” an­other trad­ing source said. — Reuters

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