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TOP PORTS


Competition heats up for Fujairah


A slew of infrastructure developments under way


bunker market share generated from the key Asia-Europe shipping trade. Located along the intersection of the Persian


M


Gulf and the Gulf of Oman, the United Arab Emirates (UAE) port of Fujairah has historically dominated the region's bunkering scene, but only because there were no other credible ship refuelling options in the Middle East. That is about to change. The major port on the east coast of UAE sits


on a strategic position just outside the bottleneck of the Strait of Hormuz, with a one-way open access to the Indian Ocean. Surrounded by key crude oil exporting nations


such as Saudi Arabia and Iran, Fujairah's bunker sales rely heavily on oil tankers calling at the port. Changes in the volumes of crude oil leaving the Middle East, influenced by OPEC's output quota, will have an immediate impact on Fujairah's bunker sales. Fujairah port received approximately 11,790


ships in 2010, of which 70% were oil tankers, according to data from the Fujairah Port Authority. A slew of infrastructural developments are


underway to enhance the port's services for oil exports and storage. A 370 km pipeline that will carry around 1.5m barrels per day of crude oil from Abu Dhabi's onshore Habshan field to Fujairah port for exports is expected to be commissioned in the fourth-quarter of this year. There will also be three single point mooring buoys for deepwater tank loading. Another proposed 200,000 barrels per day


refinery in Fujairah is slated to come onstream by mid-2016, allowing the port to reinforce its position as a major oil and petroleum products export hub. The port is also building a further 1,500 m of


new berths, scheduled to open in the first-quarter of 2012, complementing the 840 m of existing berth to cope with rising exports of oil products. In line with the exports and trading


developments, onshore storage facilities in Fujairah are forecast to almost double to 7m cu m by 2012 from the current 3m cu m. Just as developments are taking place at


Fujairah itself, other regional ports are also sensing


iddle East bunkering centre Fujairah is facing competition as regional ports are upping the game to compete for the voluminous


opportunities and taking steps to challenge the UAE port. Neighbouring countries Djibouti and


Oman are developing their own bunkering stations to capture the shipping activities that ply the Suez Canal. For ships plying the east-west trade, Fujairah offers only a one-way route passing through the Strait of Hormuz while the bunkering stations at Djibouti port and Oman's Sohar and Salalah ports offer shorter detours. The drawback of Djibouti and Salalah


ports is the threats of pirate attacks, as the ports are literally in the backyard of the horn of Africa – the haven for Somali pirates. The advantage that UAE and Oman bunkering


stations need to capture is their refiners' desulphurising ability so as to offer low-sulphur bunker fuel, required by ships entering European waters due to global regulations on curbing sulphur emissions. Competition for Fujairah could also come from


Egypt's Port Said. The Egyptian port authority is harbouring an ambitious $100m plan to build two bunkering terminals along the Suez Canal, one in the north near Port Said and one to the southern end of the canal. Current bunkering facilities at Port Said are


small and the port suffers from perennial lack of products. It sells less than 500,000 metric tonnes of bunker fuel a year. The new Suez Canal facilities are projected to sell 2 - 3m metric tonnes of bunker fuel a year. However, sources familiar with the Middle East


bunkering market say Fujairah's competitors can at best hope to capture business from regional trading vessels due to their lack of economies of scale. Fujairah claims to be the world's second


biggest bunkering port by sales volume, behind the undisputed leader Singapore. Fujairah Port Authority pronounces that the port sold 24m tonnes of bunker fuel in 2010 and volumes are expected to rise 4% this year. There is industry skepticism over the official


volumes figures though with rapid growth reported in recent years. Estimates from global oil terminal operator Royal Vopak put Fujairah's 2010 bunker sales at about 10m tonnes instead. The port authority has disputed this estimate.


Seatrade Bunkering Report 2011 13


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