* U.S. LNG exports to drive demand for independent storage
* Transport sector demand could give rise to satellite
* Vopak studies expansion at existing oil storage, terminal
By Florence Tan
KUALA LUMPUR, June 11 Dutch oil and chemicals
storage company Vopak is considering building more
liquefied natural gas (LNG) storage terminals, including its
first in Asia, to meet rising demand as spot trading grows, its
chief executive said on Tuesday.
With the U.S. shale oil and gas boom, the company expects
LNG supply to rise, allowing the commodity to be traded more
freely on a spot basis. That will mean more demand for LNG
storage facilities similar to those that now facilitate global
oil trading in hubs such as Rotterdam and Singapore.
"This opens up opportunity for independent storage. That's
exactly the role that we've been playing," Vopak Chief Executive
Eelco Hoekstra told Reuters on the sidelines of an industry
conference. He declined to comment on locations being
Oil and natural gas production has rocketed in the United
States due to the emergence of horizontal drilling and hydraulic
fracturing, or fracking, unlocking decades of supply from U.S.
shale deposits, and the country is expected to start exporting
LNG later this decade.
Most LNG is traded on long-term agreements controlled by
major oil companies and a few producer countries, but as new
supply comes onstream commodities traders such as Glencore
Xstrata and Vitol are betting that there will be space
for new entrants in more liquid spot markets.
Vopak already owns two LNG terminals in Europe and Mexico
and is looking to build more.
"A lot of countries are developing LNG terminals for import
so there is the possibility to see more LNG being traded,
Demand for LNG is rising not only for power use, but also in
the transportation sector such as for trucks and ships, and that
could mean a need for smaller, satellite terminals, he said.
The United States is also expected to export more oil
products and chemicals due to output from shale developments,
and that change in trade flows could mean opportunities to build
new storage facilities or add tanks at existing terminals,
The world's largest independent storage tank operator plans
to add 4.9 million cubic meters (cbm) of oil storage capacity in
the next three years and increase its global capacity to about
35.2 million cbm at the end of 2015.
In Asia, it is adding 3 million cbm of capacity and will
have more than 10 million cbm by end 2014 as projects, including
a $620 million deepwater storage terminal for petroleum products
in Pengerang, Johor, are on schedule.
Hoekstra said oil storage demand remained healthy in the
Asian trading hubs Singapore and Malaysia, even though trading
companies such as Vitol and Trafigura have brought new capacity
onstream and others have given up fuel oil storage after losses.
"We already have a nice geographical spread in Asia and
obviously there are few spots left that we would like to enter,"
Hoekstra said, although new markets are not Vopak's main focus.
"We would like to strengthen our existing locations in China
and the rest of Asia," he said.
(Additional reporting by Luke Pachymuthu; Editing by Tom Hogue)