Brooge Energy is adding eight tanks at the site in the UAE port of Fujairah, boosting capacity by 3.8 million barrels of crude and refined products
Brooge Energy Ltd. expects new tanks at its oil storage terminal in the United Arab Emirates to be fully operational by the end of the year, with a single customer booked to lease all the additional capacity.
The US-listed storage operator is adding eight tanks at the site in the UAE port of Fujairah, boosting capacity by 3.8 million barrels of crude and refined products, it said in a statement.
The importance of adequate oil storage lurched into focus this year as the coronavirus pandemic wiped out fuel demand and left tanks around the world brimming.
Brooge will have 6.3 million barrels of storage capacity in total after the phase-two expansion is completed.
A planned third phase to add a further 22 million barrels of oil storage should be complete in late 2022, the company said. Brooge is in “advanced negotiations” with a potential customer to lease the planned third-phase capacity, according to the statement.
Storing crude and fuels gives traders options to hold on to supply until it’s needed or to keep products in the expectation that they’ll be worth more in the future. Fujairah Oil Terminal, which owns storage near Brooge’s, also plans to expand capacity.
It will invest $80 million to $100 million to build more tanks for oil products, its Commercial Director Malek Azizeh said Wednesday.
In addition to new storage, Brooge plans to build a 25,000-barrel-a-day refinery to produce low-sulphur fuel oil. The plant is to be operational in the third quarter of 2021, the company said Tuesday in the statement.
Brooge reported a 2019 loss of $77 million compared with a $16 million profit in 2018, according to the statement. The company took a $102 million charge related to the cost of its New York listing last year. It reported record revenue of $44 million and expects that figure to rise this year with the start of the new tanks.