Dubai: Oil storage capacity in the UAE port of Fujairah is expected to rise by 2 million cubic metres (mcm) this year to just over 6 mcm, port data shows.
The port outside the Strait of Hormuz, a vital Gulf oil export route which Iran has threatened to block, has seen a boom in storage facility building since late 2009.
But the pace of construction has slowed over the last year, several traders said, with the looming threat of overcapacity and lower forward prices for oil making storage unattractive.
Fujairah had 4.07 mcm of oil storage capacity at the end of 2012, port figures show, with Vopak Horizon Fujairah accounting for about half.
Another 2 mcm is expected to come online in 2013, including capacity additions from existing companies such as the Emirates National Oil Company (Enoc), GPS Chemoil and Socar Aurora, along with new port investors such as Gulf Petrochem.
According to data supplied by port authorities, another 2.3 mcm of storage will be added when the seventh phase of Vopak Horizon’s expansion project comes online and Singapore-based Concord Energy and China’s Sinopec finish their 880,000 cubic metre project.
By 2015, Fujairah’s oil storage capacity is expected to rise to almost 9 mcm, according to the port.