Development in the East Med from VTTI

Transcription

1 Development in the East Med from VTTI Editorial: Roland Douglas In November 2014 the new 300m VTTV terminal project opened in Vasiliko, Cyprus. Its strategic location will be the first of its kind in the Eastern Mediterranean, connecting Europe and the Black Sea with markets in the Middle East and Asia. This is an important development for European oil and gas transit and VTT Vasiliko General Manager, George Papanastasiou talks to Total World Energy about the development of the project The movement of oil and gas in the Mediterranean is critical for the energy industries of many nations. Asian and eastern countries depend on efficient transportation to supply product in and out of their borders; the North African market remains important to European supply; European nations rely on the Med for vital imports and the handy links to the Red Sea and the Black Sea as well as Russia and the Middle East make the Mediterranean an international hub for oil and gas transportation. A tanker heading for the UK from Qatar will face a long and tricky journey of around 20,000 km if it has to head south around Africa and the Cape of Good Hope and up the Western African shipping lanes, not to mention the threat of piracy. But heading through the Arabian Sea and the Red Sea, into the Mediterranean will save time and money despite the obvious choke points at the Strait of Hormuz, Bab-el-Mandeb and the Suez Canal. And now, to make things even more convenient, there is a new terminal in a strategic location on the island of Cyprus which will help to connect Europe and the Black Sea with markets in the Middle East and Asia. The terminal is VTT Vasiliko and is located close to the Port of Vasilikos, 50km south of the country s capital, Nicosia. Owned and operated by international storage group VTTI, the VTT Vasiliko terminal has a 543,000 m³ storage capacity, 28 PAGE 14

2 VTT Vasiliko Ltd tanks, four jetties and a 17.5m maximum draft and this is all in the first phase of construction. Phase two (currently under evaluation) will see the terminal create an additional 13 tanks and an extra capacity of 305,000 m³. VTTI is a fast-growing independent provider of energy storage worldwide. Founded in 2006 by the Vitol Group, MISC Berhad became co-owners in The company currently offers eight million cubic meters of combined storage capacity across five continents. This will rise to over 10 million in the near future as new projects come on line. It is strategically located in a region where oil terminals are not common. VTTI have high expectations from this Terminal because of its location and the flexibility it can provide to its users General Manager for VTT Vasiliko, George Papanastasiou tells Total World Energy that fantastic progress has been made with construction of the terminal and first oil is expected this month. The EUR 300M oil storage terminal of VTT Vasiliko Ltd is almost complete and it is expected to receive the first oil in November VTT Vasiliko is VTTI s latest investment developed from a green field site, which incorporates the latest standards and technology. It is strategically located in a region where oil terminals are not common. VTTI have high PAGE 15

3 you can rely on our experience Serving the Cyprus ports since 1951 Ship Agency Services at VTTV Vassilikos, the Energy Hub of Cyprus. The first Oil Storage Terminal in the Eastern Mediterranean, connecting Europe and the Black Sea with markets in the Middle East and Asia. -Ship Agents at VTTV Vassilikos -Port Agents at all Cyprus Ports -STS Operations -Offshore Support Services -Oil & Gas Logistics -Crew Changes FONASBA QUALITY STANDARD We place our services at your disposal. Please contact us: Shoham (Cyprus) Ltd 77 Franklin Roosevelt Ave. 3011, Limassol,Cyprus tel.: fax: web: expectations from this Terminal because of its location and the flexibility it can provide to its users. The information on the first owner and transporter is commercially sensitive but the products will be jet fuel, diesel and possibly naphtha. A CHALLENGING PROJECT A project of this size is not an everyday occurrence for Cyprus. The value of the VTT Vasiliko terminal is equal to 1.7 per cent of the country s GDP and Papanastasiou says that a project on this scale has not come without challenges. There have been challenges in all phases and parts of the project. However, the offshore marine jetty has been the most difficult part as the Cypriot Authorities were lacking knowledge to license what was proposed and the knowledge for its construction was very It is strategically located in a region where oil terminals are not common. VTTI have high expectations from this Terminal because of its location and the flexibility it can provide to its users limited locally. Securing the required permits and licenses was a slow process at the beginning as this is the first project of its kind in Cyprus and the authorities were lacking the knowledge. This had an impact on a late opening of the terminal. Going forward, we believe that the VTTV project will serve as a case study for future energy related developments in Cyprus. In March 2012, a deal was signed with leading international building, civil and electromechanical engineering contractor, the J&P Group for construction of the terminal. J&P General Manager, Efthyvoulos Lacovides said at the time: J&P, with its experience in projects of similar complexity around the world, will begin the project immediately and will complete it within the deadline of the agreement, the first phase in 24 PAGE 16

4 VTT Vasiliko Ltd months and the second in 26.5 months. Papanastasiou says that the relationship between J&P and VTT Vasiliko has seen positive results. A three year relationship characterised by constructive work, exchange of knowledge, share of experience and close cooperation was marked with the delivery of a fit for purpose oil terminal in the East Med at the end of Oct 2014, he says. And topping off a project which has been widely regarded as a success, VTT Vasiliko has received all of the HSE (Health, Safety and Environmental) and EIA (Environmental Impact Assessment) certificates that are required to operate such a facility. The VTTV terminal meets the latest HSE standards of the oil storage industry. Furthermore the requirements of an EIA which was carried out, have been exceeded by the company, explains Papanastasiou. and potentially export following recent discoveries of natural gas and other hydrocarbon resources. Because of the global interest in the region, VTT Vasiliko has designed its storage tanks to meet the needs of potential customers. The decision was made on the profile of the commercial activities of potential users of the Terminal, says Papanastasiou. The tanks are a mix of mild steel, mild steel coated and mild steel insulated in design. These can be used to hold gasoline, jet fuel, kerosene, naphtha, gasoil, diesel, fuel oil and petrochemicals. One of the key rationale behind the development of the terminal is the strategic location that Cyprus offers; perfect for moving fuel oil from the Black Sea to the East, ideal for moving Middle Distillates from the East to the West, and excellent for moving gasoline from Europe to the East Med and the Red Sea. We expect our Terminal to enhance the supply chains of players moving products in all these directions but mostly those that break bulk in the East Med region. The deep sea marine facilities the VTTV terminal offers BUSINESS IN THE EAST MED According to the US Energy Information Administration (eia), the eastern Mediterranean region, usually defined as Cyprus, Israel, Jordan, Lebanon, Syria, and the Palestinian Territories, is currently undergoing changes to its energy landscape. With expected economic growth, and the population of the region forecast to grow from 45.3 million in 2010 to between 58 and 62 million in 2030, energy demand should increase noticeably over the next two decades. This, along with growing export opportunities, means that the region will receive more and more tankers of bigger capacity and the likes of Eni, Kogas and Total have all showed intentions to explore further in Cypriot water PAGE 17

5 and the related flexibilities is exactly what oil traders were missing in this region. With the development of mega refineries in the Middle East and the closure of refineries in Europe, it is something we expect that will change the balances and we will see more products moving from the Arab Gulf/Red Sea towards Europe in the future, Papanastasiou says. SLICK IN CYPRUS Apart from the large initial outlay from VTTI into Cyprus for this project, there are many more benefits set to be realised as a result of the new terminal. The construction of the terminal is estimated to generate revenues of 18m per year from port fees, and the country is expected to receive further proceeds from taxes paid by companies to The VTT Vasiliko investment as the first onshore infrastructure energy project has showed the direction and set the pace. It will serve as an example for investors looking for opportunities around the globe, to see Cyprus as a location to put their money in energy related projects transport their products through the terminal. Local people will also benefit as Papanastasiou explains: Local resource is the direction from VTTI. Cyprus offers highly educated human resources which only lacks the experience due to the specialised knowledge that is required in this case and the small size of the market. Only when a certain skill or competency is not possible to develop locally, VTT Vasiliko will consider importing resources and this will be on a temporary basis. And with a company like VTTI investing in Cyprus, the General Manager suggests that the country could see more investment from energy companies in the future. The VTT Vasiliko investment as the first onshore infrastructure energy project has showed the Joannou & Paraskevaides Group (J&P) is an international contracting company, who undertakes a wide spectrum of construction work in four continents for more than 70 years. J&P has been successfully involved in the Oil & Gas Industry over the last 40 years. J&P has extensive experience in the construction on EPC basis of oil gathering and processing stations, export terminals and tank farms, Gas-Oil Separation Plants, cross country pipelines, Gas Plants, Oil Refineries and Petrochemical Plants and other associated works in most countries in the Middle East, North Africa and Europe. J&P is proud to include amongst its Clients, most major international Oil & Gas Companies and Operators. Most recent project is the Vasiliko Terminal in Cyprus, a 600,000 m3 capacity multi-products tank farm comprising of 36 no. tanks and related Terminal Utilities, and ship loading facilities capable to receive simultaneously four tanker vessels of max. 160,000 dwt capacity through a 1500 m long marine jetty and mooring/loading platforms. PAGE 18

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