INTERESTING REPORT ON OILS STORAGE
We transcribe hereunder an interesting report prepare by Odin-RVB Storage:
Storage Market Report pril 2020
After being quoted and interviewed by newspapers and tv stations, here the original ODIN-RVB Tank Storage Solutions report.
April will go into the history books as the first time ever that the oil price (WTI) went below zero. Since storage capacity plays a crucial part in this, our industry was put in the spot lights. The bottleneck in the USA is called Oklahoma. In combination with global oversupply, the reduced demand as result of Covid-19 and the lockdown, this oil price madness was created. Any tank capable to store crude oil has been rented, since profits can be made and solutions are looked for to keep pumping up the oil.
The demand of tankage is extremely high and although there is only very limited availability we haven’t seen very high storage rates. Of course the rates have been higher than 6 months ago, but the terminals favor 2 year terms over high rates and short term contracts. Terminals who had no availability begin March are now complaining, since they didn’t benefit from higher rates or renewed contracts and they only see a slowdown of activity, since product is waiting to sold at higher rates at a later date. The available capacities that we are finding and bringing to the market are the typical ‘oddballs’ that is to say that with each terminal there is a certain challenge either in the tank setup, the draft or the import/export limitations. Even mothballed terminals are being brought back to life or maintenance has been postponed where possible. Especially the outer ports which suffered the most from backwardation, finally see healthy rates and business for their tanks and caverns.
Next to this extreme occupancy in land based tanks and underground in caverns, we have seen a surge in floating storage as well, with time charter rates shooting through the roof. Millions of tons of crude and petroleum products float at all the well known anchorages of the world. Waiting for a home, a tank or an offset market. Although the oil producing countries ( OPEC as well as others, including Russia ) have now agreed on cutting the output, they will still produce more than needed. But without an outlook when this oil or products are needed, it can be a very expensive exercise. At time charter rates of roughly $20,000 pd for a M/R, the comparison with shore storage is already 3 times as expensive. Now those rates jump up, the floating storage is not economical anymore, but will be considered for short term solutions.
With the WTI crude oil price dropping below $ 0, an obvious effects is that any crude oil storage in the US that was not committed yet has been taken in the meantime. The only options left are tanks that are to be refurbished, with lead-times varying between 6-12 months, or new build tanks with a lead-time of at least 12 months. For other product groups however, particularly for (easy) chemicals and diesel, there are still tanks to be found.
In the chemical market we see quite some players facing trouble, reorganizing the plant output now that global consumption has reduced due to Covid-19. Expansion plans are withdrawn and some producers even have to terminate their existing storage contracts. To build up and have stock doesn’t outweigh the costs of it anymore. On the other hand we see an increased demand for spot storage which often has to do with the fact that customers can’t receive product in today’s market forcing suppliers to look for temporary storage in a market that is highly congested. 2nd half this year a lot of new capacity is coming to the market and after the summer we expect to see signs of oversupply in the North Western European market.
Biofuels & vegoils market
We see an increased demand for ethanol storage, now that sanitizers play such a crucial part in today’s life. Unfortunately it remains rather difficult to find a suitable tank for this product as permitting and high excise keep preventing terminals from offering space for just a short period. As vegoils tank occupancy is at its limit for quite some time now, more and more terminals that are still left with tanks for easy chemical products and who are facing difficulties to rent the space out for a longer period are studying the possibility to offer tanks for FAME or HVO. They feel more comfortable in jumping into that market, rather than keeping the tanks empty for spot chemicals requests.
The biodiesel storage in heated tanks in the ARA-region remains strong. Due to the short supply, available heated opportunities within ARA are taken quickly. Consequently outer ports or barge terminals are being booked provided they have the heated tanks.
The number of terminals in the Middle East is huge, however you have to be very lucky to find any free storage in any of these terminals. There are only a few leftovers which can be used for some chemicals or for the local market. In China we see a 50,000 m3 crude for example but since supply to such a tank isn’t economical, this tank is still available.
Long term projects
The availability list includes also some new build and long term projects where investments are required which can only be covered by long term contracts. Depending on the project it can be 2 year contract, but more common is 3-5 year contracts to get such projects alive. The list is much longer, since terminals with spare land are always interested to expand and build against a contract.
Meet the team
Till further notice we will only virtually meet. Video calls are the new wining and dining. However our team is available.
Please find a snapshot of opportunities(available tanks at the terminals)
2.100 diesel/gasoil ARA Q3 2020
125.000 dirty petroleum prods ARA Q4 2021
11.785 chems/various ARA now
15.500 chems ARA Q3/Q4 2020
17.000 vegoils (h) ARA Q1 2021
2.400 chems Netherlands now
2.850 vegoils (unh) Netherlands now
5.000 bitumen Netherlands now
30.000 diesel/biodiesel Germany (North) Q1 2021
40.000 diesel/gasoil Germany (North) Q1 2022
3.300 chems/various Germany, River Rhine now
1.800 chems/vegoils UK (West Coast) now
100.000 diesel/gasoil UK (West Coast Q1 2021
8.000 chems/various UK (East Coast) now
1.690 specialty chems UK (East Coast) now
5.000 biofuels/vegoils Denmark now
14.650 diesel/gasoil Denmark Q3 2020
5.500 diesel/gasoil Norway Q3 2020
5.500 diesel/gasoil Norway Q1 2021
340.000 crude Finland Q3 2020
8.500 gas Finland now
6.850 chems/various Estonia now
10.000 vegoils Poland now
South Europe/Med/Black Sea
20.000 light ends France (South) now
5.960 chems France (South) now
360.000 crude/cpp NW Spain Q4 2021
15.000 chems/various East Spain Q1 2021
89.000 dpp/cpp NE Italy Q2 2021
363.000 crude Croatia Q2 2021
6.600 light ends Albania now
16.500 vegoil/(bio)diesel Albania now
66.500 chems/diesel Turkey now
30.000 light ends Georgia now
100.000 crude Georgia now
8.400 chems Russia (SW) now
21.568 chems Egypt now
3.000 chems Kenya now
10.000 chems Tanzania now
20.000 diesel/gasoil Tanzania now
20.000 dirty petroleum prods Mozambique now
10.000 bitumen India (Gujarat) now
47.000 chems/cpp UAE now
30.000 chems/cpp UAE Q4 2020
6.000 chems UAE now
8.000 chems China (North) now
14.500 chems China (South) now
6.000 chems China (Gr. Ningbo)now
3.000 chems China (Yangtze River)now
8.000 chems China (Shandong) now
615.000 crude/dpp South Korea Q1 2021
30.000 vegoils Malaysia now
50.000 chems/various Gr. Singapore now
North America (bbl)
585.000 diesel/gasoil North Carolina, USA now
255.000 chems Louisiana, USA now
25.000 diesel/gasoil Texas, USA now
139.200 chems Texas, USA now
115.000 clean petroleum prods Texas, USA Q4 2020
250.000 chems/cpp Texas, USA Q2 2021
250.000 chems/cpp Texas, USA Q3 2021
150.000 clean petroleum prod Florida, USA Q4 2020
Central & South America
365.079 cpp/crude Aruba Q3 2020
40.000 chems/clean prods Puerto Rico now
178.745 diesel/gasoil Colombia (caribbean) Q3 2020
36.836 dpp/ccp Colombia (caribbean) now
10.000 chems/vegoils Argentina now
23.000 diesel/gasoil Argentina now
3.000 dirty petroleum prods Argentina now
Will keep you posted.
Antares Servicios Maritimos S.A.
For more information