Fujairah’s Brooge eyes ventures amid plans for refining unit
Exclusive: The unit, which will come on stream in the first quarter of next year is part of a multiphase 250,000bpd refinery
Fujairah-based Brooge Petroleum is eyeing possible ventures with international terminal operators as it brings online the first phase of a 250,000 bpd refinery next year, according to its chief executive.
“We have very good contacts with them globally and locally but we don’t exclude or include any further discussions with them in terms of global synergies,” Nicolaas Paardenkooper told The National in an interview.
The UAE, which accounts for around 4.2 per cent of global oil production, is a major player in the crude storage industry through hubs such as Fujairah, which is the world’s second largest bunkering port behind Singapore. Just outside the congested Strait of Hormuz, Fujairah has the capacity to handle as much as 60 million barrels of crude and oil products, with capacities expected to increase with the entry of players such as Brooge Petroleum.
The company, which announced a merger with Nasdaq-listed Twelve Seas in the US earlier this year will look to draw on its strong equity position to pursue overseas investment opportunities.
“Given the final part of the merger is almost completed, you might expect in the course of next year additional ventures,” said Mr Paardenkooper.
“Being a listed company in the US, there’s good opportunity for us to the equity markets for various expenses, since there are good sources to provide for capital,” he added.
In the first quarter of next year, the company will bring online a 25,000 bpd refining unit, part of a multiphase 250,000 bpd refinery in order to meet global demand for low-sulphur fuel oil, in accordance with International Maritime Organisation regulations.
The IMO will enforce regulations to cap sulphur content in bunker fuel from 2020 onwards, compliance to which is critical for players located in one of the world’s largest bunkering hubs.
Work on the initial phase is already underway with an engineering, procurement and construction contract awarded to Spain’s Sener and Audex from Singapore last week.
Feedstock for the refinery will come from Brooge’s partner Sahara - a company with offices in Singapore, Geneva and Nigeria. Mr Paardenkooper declined to comment on the crude grades to be processed in the refinery.
Parallel to its refining plans, the company is undertaking expansion of its storage capacity in Fujairah. It currently operates 14 tanks with a collective capacity of 400,000 cubic metres. Last year, Brooge announced plans to expand the capacity further to 600,000 cubic metres, set for completion in the second quarter of next year.
“Site works of phase two terminal expansion are progressing well and on the agreed timeline,” said Mr Paardenkooper.
The company would also look to incrementally increase capacity further, if the market should require it.
“We certainly are looking at more capacity. Tank storage and refineries are our core business. If there is an opportunity to increase capacity in Fujairah we will most certainly do that,” he added.
Updated: September 21, 2019 11:44 AM