Dubai's state oil firm to build storage for refined petroleum products to add to terminals in Singapore and South Korea.
ENOC expands Asian presence with China storage facility
Emirates National Oil Company (ENOC), the Dubai oil company, plans to increase its Asian footprint with a storage terminal in China.
The facility for refined petroleum products in China would bolster ENOC's Asian operations, which already include terminals in Singapore and South Korea.
The Dubai company runs facilities with storage space it can rent to customers in Asia and in the UAE, Saudi Arabia and Djibouti through its subsidiary, Horizon Terminals.
ENOC, which is wholly owned by the Dubai Government, operates 30 joint ventures and subsidiaries internationally, including an aviation fuel sales division, a refinery in Jebel Ali and petrol stations across Dubai and the Northern Emirates, and plans to expand in Saudi Arabia.
Tayyeb al Mulla, the chief executive of ENOC's international refining and marketing division, said the company was seeking a Chinese venture partner that would allow it to keep a necessary level of control over its operations there.
"Quality and branding has to remain the same," Mr al Mulla said. "We don't want to go under an investment that we don't run."
ENOC is also looking to expand its access to European trading with a storage facility it is building in Morocco and plans for another on the island of Malta.
Ashraf al Hashimi, the company's group manager for engineering and construction, said: "It's a strategic location to cover the Mediterranean area. We don't have that exposure there."
In May, the company announced plans to build a terminal in Malta with a total capacity of 600,000 cubic metres. ENOC is still negotiating with Malta's government and securing the land, Mr al Hashimi said.
The terminal's ultimate capacity will depend on the size of the plot and the accessibility of jetties. To make the project economically viable, the facility would need to hold 500,000 cu metres or more, Mr al Hashimi said.
"Lots of approval has to come from the government entities," he said. "Malta, being a very small island, they are considering the environmental impact."
The Moroccan and Maltese terminals were likely to be the extent of the company's storage operations in the Mediterranean, Mr al Hashimi said.
"We don't want again to compete with ourselves," he said. "We cannot invest and put lots of things on the ground but not be able to fill it up."
ENOC's plans mirror strategies among other regional energy companies to increase their presence in the growing Asian market by securing storage facilities.
In June, Saudi Aramco signed an agreement with Japan's Agency for Natural Resources and Energy to supply crude to a terminal in Okinawa, giving Japan greater energy security.
Kate Dourian, the Middle East editor of the oil trade data publisher Platts, said: "If you look in the future, demand growth is going to come from Asia. They're basically putting the oil where the market is."