Royal Dutch Shell and Vitol, a global energy trading house, are stepping up their operations in the port of Fujairah to store Iraqi crude as production from the OPEC member rises, reported Reuters.
In an attempt to avoid any fluctuations in production out of Iraq, Shell leased five large crude storage tanks at the port in 2015 to take advantage of low oil prices, according Arab News. The storage tanks were built specifically according to Shell’s requirements, as the firm is the only ones who have a contract with storage company, Vopak, to bring crude using the new jetty. Furthermore, Vitol has started to store crude sold by the northern Kurdish government in Fujairah and that is being used in its 82,000b/d Fujairah’s refinery.
The storage tanks leased by Shell have a total capacity of 478,000 cubic metres and were built by Vopak, the world’s largest independent storage tank operator. They are part of an expansion plan to take the total storage capacity of Vopak’s joint venture in Fujairah to 2.6mcm.
Iraq is OPEC’s second largest producer, with an output that has almost doubled since the start of 2010, at about 4.7mb/d. The country aims to reach a production target of 5.5-6mb/d of crude by 2020.