Government seeks to revive Fujairah Refinery
Authorities have ambitions to resume refinery operations at the old Fujairah Refinery Company (FRC), Dr. Salem Abdo Khalil, Technical Advisor, Government of Fujairah, told delegates during last week's fourth International Fujairah Bunkering and Fuel Oil Conference (FUJCON).
"Our ambition is not only to resume refinery operations, but also upgrade and modernize the facilities to improve its technical and economical viability," Dr. Khalil said.
The government-owned FRC was operated in the past by Metro Oil Corp., and played an important role in supplying Fujairah with the desired straight-run fuel oil that helped to build Fujairah's position as a leading bunkering centre. Since operations ceased at the refinery in the late 1990s, Fujairah's bunker suppliers have imported fuel oil cargoes from other regional refineries, mainly from Iran.
FAL Oil Company Limited took over the redundant refinery in May 2004, and it now provides the FAL Group with an estimated 460,000 cubic metres (m³) of oil product storage capacity.
The former refinery supports FAL's activities as a cargo trader specialising in fuel oil and gas oil, as well as the company's bunker supply operation. FAL also sublets storage at FRC to FAMM Middle East Ltd, supporting its bunkering activities in Fujairah, Bunkerworld has learned.
During an open forum debate at the end of FUJCON 2005, Bunkerworld asked the panelists if plans for FRC included production and storage of bunker fuels for local players, and if they could name any companies that would be involved in the refinery upgrade.
"We feel there is a need for onshore storage, but the refinery can be better utilised," Dr. Khalil replied. He emphasised that the refinery should concentrate on lighter products rather than fuel oil output, and said visions for the refinery included installing crackers to optimise output of lighter products.
Regarding timing for the refinery upgrade, Dr. Khalil said the government was hoping to see it within 24 months or so, by which time he said there would be "alternative storage" available for bunkers elsewhere.
He did not specify any interested parties, but said in an earlier speech that "we continue to receive interest from companies wishing to maximize the use of the facilities and the very prime and strategic site and land of the company."
Dr. Khalil was also unable to specify where alternative bunker storage would be found, however FRC is situated right next to the 1,090,000 m³ capacity Vopak Horizon Fujairah terminal, which inaugurated dedicated bunkering storage and loading facilities in February this year.
Local sources told Bunkerworld today that at present, investors are still being sought for the FRC upgrade project and that no concrete plans are in place yet. Meanwhile, the bunker suppliers using the refinery storage tanks have no immediate concern about the availability of alternative land-based storage.
A local supplier told Bunkerworld that with current bunkering volumes of around 800,000 metric tonnes (mt) per month "Fujairah is long on bunker storage at present."
There is around 1.5 million mt of fuel oil storage available at FRC and Vopak Horizon combined, the supplier said, which is more than enough to support Fujairah's bunker trade. If the government's ambitions for the refinery take shape, there would still be enough bunker storage capacity left at the Vopak Horizon terminal.
Dr. Khalil also told reporters during FUJCON 2005 that the Port of Fujairah is expected to increase its total on-shore tank storage by about 400,000 mt from its current capacity of 1.9 million mt. "Negotiations are underway with several regional suppliers looking to enter into the Fujairah bunker market," he was reported to say on the sidelines of the conference.
In other news last week, FAL Oil Company Limited has secured a $40 million syndicated term loan facility to expand its business, which some market sources speculate may include investing in new shore-based storage facilities.
FUJCON 2005 was held under the auspices of the Fujairah Government and also received sponsorship from a host of private companies.
See also:
"Our ambition is not only to resume refinery operations, but also upgrade and modernize the facilities to improve its technical and economical viability," Dr. Khalil said.
The government-owned FRC was operated in the past by Metro Oil Corp., and played an important role in supplying Fujairah with the desired straight-run fuel oil that helped to build Fujairah's position as a leading bunkering centre. Since operations ceased at the refinery in the late 1990s, Fujairah's bunker suppliers have imported fuel oil cargoes from other regional refineries, mainly from Iran.
FAL Oil Company Limited took over the redundant refinery in May 2004, and it now provides the FAL Group with an estimated 460,000 cubic metres (m³) of oil product storage capacity.
The former refinery supports FAL's activities as a cargo trader specialising in fuel oil and gas oil, as well as the company's bunker supply operation. FAL also sublets storage at FRC to FAMM Middle East Ltd, supporting its bunkering activities in Fujairah, Bunkerworld has learned.
During an open forum debate at the end of FUJCON 2005, Bunkerworld asked the panelists if plans for FRC included production and storage of bunker fuels for local players, and if they could name any companies that would be involved in the refinery upgrade.
"We feel there is a need for onshore storage, but the refinery can be better utilised," Dr. Khalil replied. He emphasised that the refinery should concentrate on lighter products rather than fuel oil output, and said visions for the refinery included installing crackers to optimise output of lighter products.
Regarding timing for the refinery upgrade, Dr. Khalil said the government was hoping to see it within 24 months or so, by which time he said there would be "alternative storage" available for bunkers elsewhere.
He did not specify any interested parties, but said in an earlier speech that "we continue to receive interest from companies wishing to maximize the use of the facilities and the very prime and strategic site and land of the company."
Dr. Khalil was also unable to specify where alternative bunker storage would be found, however FRC is situated right next to the 1,090,000 m³ capacity Vopak Horizon Fujairah terminal, which inaugurated dedicated bunkering storage and loading facilities in February this year.
Local sources told Bunkerworld today that at present, investors are still being sought for the FRC upgrade project and that no concrete plans are in place yet. Meanwhile, the bunker suppliers using the refinery storage tanks have no immediate concern about the availability of alternative land-based storage.
A local supplier told Bunkerworld that with current bunkering volumes of around 800,000 metric tonnes (mt) per month "Fujairah is long on bunker storage at present."
There is around 1.5 million mt of fuel oil storage available at FRC and Vopak Horizon combined, the supplier said, which is more than enough to support Fujairah's bunker trade. If the government's ambitions for the refinery take shape, there would still be enough bunker storage capacity left at the Vopak Horizon terminal.
Dr. Khalil also told reporters during FUJCON 2005 that the Port of Fujairah is expected to increase its total on-shore tank storage by about 400,000 mt from its current capacity of 1.9 million mt. "Negotiations are underway with several regional suppliers looking to enter into the Fujairah bunker market," he was reported to say on the sidelines of the conference.
In other news last week, FAL Oil Company Limited has secured a $40 million syndicated term loan facility to expand its business, which some market sources speculate may include investing in new shore-based storage facilities.
FUJCON 2005 was held under the auspices of the Fujairah Government and also received sponsorship from a host of private companies.
See also:
- FAL Oil secures $40m loan to finance expansion (April 14, 2005)
- No clear cut-off for single-hulls in Fujairah (April 13, 2005)
- Fujairah to increase tank storage by 400,000 mt (April 13, 2005)
- 'Jewel of Arabia' sees more room for growth (April 12, 2005)
- Vopak Horizon Fujairah opens first dedicated bunker pier (February 17, 2005)
Unni Einemo | Mon Apr 18 13:38 GMT 2005