What does a sub-$50 barrel price of oil mean for the tank storage industry? Industry experts share their views.

A year is a long time in the tank storage industry. When the industry last assembled in Dubai for Tank World Expo 2014, the price of a barrel of oil was averaging $104. Now nearly 12 months later, with Tank World Expo just three weeks away, the price is around $44 per barrel. A major change by anyone’s reckoning. The effects on the tank industry have been significant, with traders seeking out storage in order to sell at a profit in the future when the price rebounds. Traders are buying up storage at such a rate that the International Energy Agency anticipates with stocks levels already at an 80-year high, the limits of some regions tank capacity are now being severely tested.

With the demand for storage rising other more unconventional sources – whether on the high-seas in floating storage, in rock caverns as in Singapore or simply being drilled but remaining in the ground untapped (also known as the ‘fracklog’) are being utilised. So, whilst the low price of oil provides challenges for sections of the energy industry, for storage it presents a major opportunity. And one that will be investigated in detail by the global expert speakers at Tank World Expo (13-14 April 2015) in Dubai.

We asked Hendrik Schaake, Business Development Manager at Endress+Hauser, an Associate Sponsor of the event how the price challenge is being felt by the industry:  “2015 started with mixed feelings about the reaction of oil companies with regard to oil price development. To some extent, we do of course face the effects of these developments with some new projects being postponed or cancelled. However, many projects are still on-going since the price drop is not a result of a decrease in demand. Furthermore, we see a strong increase in interest for optimization solutions for existing installations to streamline product and business information flows; reduce losses and assure safety.”

Edwin Lammers, Executive Commercial Manager of the SOHAR Port and Freezone and one of Tank World’s lead speakers, on being asked about the role of super-tanker storage: “In terms of storing oil on the high-seas, there are an equal number of benefits as there are risks. For example, towards the end of last year, the spot price for oil was lower than in the futures market. This is one of the reasons why crude oil is being stored at sea as companies currently see a greater benefit in buying up physical oil stocks and immediately selling futures. The challenge, of course, is that if interest rates or storage costs increase, the cost of storing oil out at sea would eclipse any future profits.”

Tank World Expo has assembled ahost of global speakers to discuss this issue and many others representing facilities, terminals and ports in the UAE, Oman, Egypt, Jordan, Turkey, the Netherlands, Nigeria, India plus exhibitors based in 15 different countries across three continents. All are preparing to visit Dubai for two days of expert insight, practical case studies, in-depth discussion, technology launches and networking.

Tank World Expo in Numbers:

• The best attended Tank Storage event in Middle East
• Visitor increase of 640% between the 2013 and 2014 event.
• 120% growth in exhibitors since the 2014 edition.

The Expo is close to being a complete sell-out, popular with both established businesses in the industry and those looking to move into it.  With exclusive rights in Dubai, Tank World 2015 will provide a unique platform for over 80 speakers and 100+ technology and solutions providers exhibiting. In addition to support from the UAE Ministry of Energy, the event is sponsored by industry leaders Emerson and Endress+Hauser with support from Colfax, ILF Consulting Engineers plus Knowledge Partners, Ernst & Young, Ratio Group, Fujairah Free Zone, Horizon Terminals, ENOC, Socar Aurora, GPS Chemoil, Gulf Petrochem, Saudi Aramco, ABBCO, ADPC, DP World, Sohar Port, Salalah Port, Port of Tarragona, Stolthaven, Cylingas, PJK International and many more.

NEW! The1st Tank World Annual Golf Tournament, Dubai taking place at the Faldo Golf Course on Sunday, April 12th 2015. Registrations are now open.

About Tank World

Global energy markets continue to evolve and demand for storage across the region increases. The definitive tank storage showcase, supported by the Ministry of Energy, returns exclusively to the Dubai World Trade Centre (13-14 April 2015). Now in its third year, the Tank World Expo team has a continued vision is to deliver a show that enables executive industry leaders to share best practice, benchmark and set a blueprint for development in the region. For more on the event: www.tankworldexpo.com

Contact:

For more information please contact Luke Upton, Editor, Tank World News ([email protected]) or call + 44 (0) 20 7045 0900

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