The Fujairah Oil Terminal (FOT) is upgrading its infrastructure to link the storage site with a key crude pipeline and the terminal for supertankers at the Port of Fujairah, in order to meet an expected boom in crude oil trading, FOT chairman Steve Bickerton has told Reuters.
“That’s a game changer because it gives us access to customers who want to be moving crude oil through VLCCs and it gives our customers direct access to the ADCOP, which brings Abu Dhabi’s Murban Crude into Fujairah,” said Bickerton, who is also Senior Managing Director at midstream energy infrastructure firm Prostar Capital, a shareholder in FOT with 40 percent.
FOT, a 7.4 million-barrel bulk liquid storage terminal in the Port of Fujairah, contributed 29 percent of the throughput and accounted for about 12 percent of the Fujairah storage market in 2020.
In March this year, the United Arab Emirates (UAE) launched its own crude oil futures contract, the Murban Crude Oil Futures, a physically delivered contract, basis FOB Fujairah (ADNOC) loading terminal, UAE. The contract provides traders with a hedging instrument for Arab Gulf crude oil and other grades trading into the Asia Pacific Region.
Anticipating booming demand for Murban crude and for crude trade in the region, the Fujairah Oil Terminal is now investing $45 million in the upgrade, Bickerton told Reuters.
Last week, Prostar Capital said it had completed a refinancing for FOT with a new $280-million debt facility to replace the existing senior debt as well as to fund the connection of the terminal to the Very Large Crude Carrier (VLCC) jetty at the Port of Fujairah and the ADCOP pipeline.
“We have built one of the most successful terminal facilities in the region, and this VLCC expansion will further align our interests with those of our customers as we look to meet growing energy demand, particularly in Asia, where the bulk of FOT’s product is delivered,” Dave Noakes, Senior Managing Director at Prostar Capital, said last week.