Concord Energy's Fujairah Oil Terminal in Persian Gulf Region to be Operational by Mid-2014

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Researched by Industrial Info Resources India (Delhi, India)--Singapore-based oil trader Concord Energy's $300 million-plus crude oil storage terminal project in Fujairah (United Arab Emirates) is facing major setbacks due to the political unrest in the Persian Gulf region. Due to the turmoil, Concord Energy also has been unable to obtain funds for the project. Mired by these initial hitches, the oil terminal, which was originally slated for commissioning in the fourth quarter of 2012, is now likely to be completed by mid-2014.

To meet the financial needs for the oil terminal, Concord Energy has diluted its stake to raise about $25.05 million. Concord Energy has sold about 50% of its stock in this project to China Petroleum & Chemical Corporation (NYSE:SHI) (Sinopec) (Beijing, China). Under the terms of the agreement, Sinopec will take up about half of the 1.12 million-cubic-meter storage terminal that Concord is building in Fujairah.

Fujairah is the second-largest bunkering port worldwide. With a new upcoming pipeline, the Abu Dhabi Crude Oil Pipeline (ADCOP), which is being built from Abu Dhabi to Fujairah, will provide an overland Hormuz bypass route, transporting about 1.5 million barrels of the emirate's Murban crude daily. The Fujairah terminal leverages the strategic location and infrastructure of the Fujairah port; thus, the oil terminal being developed by Concord is likely to become a major storage site for sea-borne petroleum cargo in the region.

Apart from Concord's project, various other companies, such as Vitol Group and Royal Vopak, also are planning to add crude oil tanks to the storage sites in Fujairah. The companies, which have stakes in other fuel storage ventures there, also are firming up plans to add as much as 1 million cubic meters of crude storage capacity each.

It has been estimated that Fujairah's total capacity for storing crude oil and refined products would to increase to 13.3 million cubic meters in 2015, from the current 6.8 million cubic meters.

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