The Mediterranean's advantage for product storage lies in its geography. It offers deep waters close to shore that can accommodate vessels up to Suezmax size. It is a crossroads for fuel oil moving from the Black Sea to the east, middle distillates from the Mideast Gulf, India and Asia to northwest Europe, and gasoline from Europe to the east Mediterranean and the Red Sea.
But competition in the sector is increasing, in large part because of poor refining economics that have forced refiners to cut refining capacities and turn plants into storage terminals or biofuels plants.
Italy is a case in point. It has seen a significant loss in its refining capacity and increase in storage capacity in recent years. Eni's 105,000 b/d Gela refinery will be converted to a biorefinery, after the 80,000 b/d Venice refinery underwent the same transformation in 2012. But Total ERG's 82,000 b/d refinery and the 55,000 b/d IES-MOL plant at Mantova are being turned into product storages facilities.
A similar process is on the cards in Mediterranean France. Total is due to announce its restructuring plans for its remaining five French refineries. Its chief executive Patrick Pouyanne said in January that two of the refineries are losing money, with one making heavy losses. The 160,000 b/d La Mede refinery in the south is thought to be the most vulnerable and at risk of closure. It is very possible that the plant will be converted to storage as Pouyanne has said that Total will not close any industrial site and that all workers will continue to be employed.
Spain's Algerciras is a leading hub for oil product storage and services. Its location on the Straits of Gibraltar and the Mediterranean Sea gives it access to a key transit area connecting Europe, the Middle East, America and Asia. Algecieras has overtaken Marseille/Lavera as the biggest port for hydrocarbons. Dutch independent storage operator Vopak started up a 403,000m³ storage facility in 2013, which it co-owns with Spanish oil trading company Vilma Oil on an 80:20 basis, to store liquid fuels including gasoline, naphtha, jet and diesel. Since then it has received an environmental permit to study the feasibility of tripling its capacity.
Sometimes plans for storage operators run into problems. VTTI — a joint venture between trading company Vitol and Malaysia's MISC — has encountered stiff opposition from the local population to its plan to build a 380,000m³ storage terminal in Algerciras. The opposition has resulted in the project being put on ice.
VTTI says the project planning and development of VTTI Algerciras (VTTA) is still ongoing. "As with any other complex and highly technological logistical project, timeframes can be expected to be more fluid. The terminal will offer a safer and more efficient alternative to floating storage in Gibraltar in serving the local market for ship fuels. A pipeline to the Compania Logistica de Hidrocarburos (CLH) depot nearby will give access to the Spanish market for jet and diesel, and another pipeline to the Cepsa refinery will further enhance the terminal's interconnectivity." Currently, the storage capacity planned for VTTA is 540,000m³ in 21 tanks.
Cyprus is also firmly on the region's storage map. The country is an important transshipment hub with around 250 operations taking place off its coast annually. The Cypriot government's decision to shut down the country's sole refinery in 2004 enabled the development of oil product storage as all of the country's energy needs are met by imports. A key player in Cyprus is VTTI whose newest storage terminal in the Mediterranean started up in Vasilikos late last year. VTTV, as the terminal is known, has 28 tanks with a total storage capacity of 543,000m³ for mainly gasoline, naphtha, diesel and jet fuel. Since its start up, VTTV has been storing commercial product but it will start storing strategic stocks for Cyprus as well. Additional capacity of around 305,000m³ is planned and expected to come on stream sometime next year.
VTTV says its facility will appeal to oil companies in the business of shipping oil product from the Black Sea to Asia, from the Middle East and Asia to the west and from Europe to the eastern Mediterranean and the Red Sea.
More storage capacity is planned for Cyprus. In January, the European Investment Bank (EIB) said it was considering funding a new storage terminal in Vasilikos. This follows a proposal by the Cyprus Organisation for Storage and Management of Oil Stocks (KODAP), the EIB could provide €30mn ($34mn) out of the total cost of €40mn to construct a 210,000t petroleum tank farm for Cyprus' strategic oil reserves. The new facilities will replace the current storage facility in Larnaca, which is no longer fit for purpose.
A rival to Cyprus as an oil transhipment hub is Malta where the oil products terminal is operated by Oiltanking. The 562,450m³ facility stores crude oil, fuel oil, feedstocks, gasoil, jet fuel, gasoline and components.
Over in Greece, Vopak is looking into the feasibility of building an oil hub terminal close to Atherinolakkos in southeast Crete.
The majority of oil terminals in Greece are located in the Attiki Area (Athens) and in the Thessaloniki area where the refineries are. Nearly all inland transportation of crude oil and refined products is by ship and road. Products are also transported by rail in Greece, specifically to power plants. Rail is also used to transport local products to the Balkans.
The Delta Rubis terminal in southeastern Turkey currently has 650,000m³ of storage capacity spread over 41 tanks for liquid fuels, with investments started in 2012 to increase the capacity up to 1mn m³ over three phases. A new 2.3km jetty is scheduled to become operational this year which will be able to berth five Suezmax vessels.
The Toros Marine Terminal at Ceyhan handles both liquid bulk cargoes, including dirty and clean products. The terminal has 37 tanks with individual capacities ranging from 500m³ to 20,000m³ for storing crude oil and petroleum products.
Vopak, meanwhile, announced in January 2015 that it had sold its land position in Turkey to a Turkish industrial group. The sale is part of the divestment programme Vopak announced in July 2014 although it had taken the decision in 2012 to step out of the project aimed to develop a terminal after it became clear that it could not obtain the necessary permits and licenses within a reasonable time.
North African countries are also expanding their storage capacities. Moroccan oil company Winxo has invested in a 600,000m³ terminal at Jorf Lasfar, close to the Mediterranean but south of Casablanca on the Atlantic coast. This will be country's biggest storage and export terminal of fuels, eclipsing Tangier on the Mediterranean, which has over 500,000m³ of hydrocarbon storage.
In Israel, a plan to increase the capacity at the Ashkelon facility operated by the Eilat Ashkelon Pipeline Company to hold more gasoline and liquid petroleum gas is being considered. The facility currently has a capacity of 400,000m³. Opposition to expanding the storage facility has emerged, with the local municipality arguing that it would detract from residential building development in the southern part of the city.
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