Fujairah Oil Industry Zone draws blueprint for next round of expansion

Established in 2011, it hosts the Middle East’s largest commercial storage capacity for refined oil products, with a current capacity in the range of 10 million cubic metres. Currently, 16 companies operate in the zone.

“The first oil shipment came to Fujairah in 1992 and since then Fujairah has seen great development with regard to oil terminals as well as available capacity for storing oil,” said Capt. Salem Al Hamoudi, director of FOIZ. “This growth is in parallel with the growth of the port of Fujairah.

“Today, we have 10 million cubic metres of storage that positions us among the top three oil storage hubs of the world.” (The other two are Singapore and Rotterdam.)

“We are looking into diversification of activities — today our main focus is storage but we would like to look at the full spectrum of oil and energy processing and want to further build the capability of refining in Fujairah.”

The zone is studying the possibility of storing LNG (liquefied natural gas) as demand for natural gas is poised to go up due to IMO (International Maritime Organisation) regulations to protect environment.

“Fujairah is known to be one of the biggest bunkering [fuelling ships] hubs in the world. As per IMO 2020, one of the compliant fuels is going to be LNG. We are studying the possibility of offering LNG in future.”

Fujairah, located on the UAE’s east coast, has emerged as an key hub for oil storage and bypassing the Strait of Hormuz. The UAE also built a 370-kilometre pipeline connecting Habshan in Abu Dhabi and Fujairah with a capacity to transport 1.5 million barrels per day of crude.

“Fujairah has benefited because it is outside the Arabian Gulf and outside the chokepoint of Hormuz. We have deep water and the only VLCC (very large crude carrier) jetty in the Indian Ocean.”

Hamoudi said the zone would continue to accelerate growth in Fujairah by attracting more companies to set up their businesses in oil storage and trading. “Discussions are ongoing and we are optimistic that more (companies) should be coming soon.”

The comments come as Brooge Petroleum and Gas Investment Company recently announced their expansion plans to add 600,000 cubic meters of capacity for crude oil across eight tanks in the first quarter of 2020 in addition to the current storage capacity of 400,000 cubic meters.

Nicolaas Paardenkooper, CEO of BPGIC, had earlier said demand for oil storage would go up in Fujairah due to the UAE’s plans to boost exports as well as growing demand for crude from India and China.

A master mariner by profession, Captain Salem Al Hamoudi graduated from the Australian Maritime College and has a Masters in Port Management from the UK. He worked at a national gas shipping company in the fleet operations division of gas tankers, and part of Adnoc (Abu Dhabi National Oil Company) group. There was also a stint at Total.

Al Hamoudi joined Port of Fujairah in 2012 as a management member of Fujairah Oil Tanker Terminals. He is a member of the Fujairah Bunkering Conference Steering Committee and a Committee Member of the Fujairah Energy Data Committee FEDCom.