Category: Insights

Quick insight ARA Tank Terminal capacity expansion

The ARA region is an important trading hub in Northwest Europe due to its infrastructure and fundamentals to serve the physical market for liquid trade. Location is key and ARA’s location is exceptional due to the Rhine river that connects with the Benelux countries, Switzerland, France and Germany. Also the ARA region provides refining facilities, tank storage and is seen as oil pricing center.

In the first image you can view the evolution of the tank terminal capacity in the greater ARA region. Important capacity additions in the past two years were done by Botlek Tank Terminals, Koole Tank Storage Minerals and NoordNatie Antwerp. At the same time we can observe various expansion activities in the ARA region, which will increase the current tank storage capacity further.

Secondly in the image below you can see the capacity under construction. Various players will also be adding capacity to their current storage capacity. The total amount of storage capacity under construction will be about 2.3% of current installed capacity and will be accessible in the coming years. Besides expansions , new terminals are expected to be built as well in various ports, focusing on liquid bulk like mineral oil products & petrochemicals.

We do expect some changes that might alter the ARA fuel oil market and petrochemical market and may therefor influence the tank storage market in those segments. Are you interested to get more information contact us at the headquarters in the Netherlands at +31 (0) 850 66 25 22.

Insights from our analysts

This weeks insight from Lars van Wageningen, our Operations Manager at Insights Global, also quoted by Bill Lehane (Bloomberg) considers the market is getting tight. The inland stockpiles haven’t been replenished over summer because Rhine barges haven’t been able to operate at full capacity. Furthermore even as the water levels start to recover, the Rhine barge rates remain high; also barge traffic has risen on the main river. In addition the Bayernoil Vohburg refinery outage is also adding to tightness, with suppliers in that region looking further north for supply than usual.

A quick Insight in the ARA petrochemical tank storage market.

In Northwest Europe the oil and the petrochemical sectors are leading sectors that employ thousands of people directly and indirectly within the region. The main European production cluster for liquid bulk products is made up of the Benelux countries, Switzerland and the German and French regions that are connected to the Rhine river.

The Amsterdam, Rotterdam, Antwerp region or ARA is the main trade hub that connects Europe to global markets. The petrochemical sector is responsible for producing various materials such as plastics, paints, solvents, fibres and raw materials for pharmaceutical and cosmetics sector. Taking a closer look at the petrochemical side of the cluster and the different market participants in it, many of the companies produce goods in high-volume or ‘bulk’ quantities.

Companies in this cluster have been getting more exposed to severe competitive pressure. This has been Leading to the closure of for example La Mede refinery, Reichstett refinery, Petit Couronne refinery and the Wilhemshafen refinery. Also the decision made by Gunvor to not go ahead with their investment in upgrading the GPR site is a sign of high uncertainty amongst players about what the future will bring. Despite this at the same time there are others planning expansion like Ineos, one of the leading chemical companies with sales of around 60 billion dollars and their production network spans 171 sites and 24 countries. Ineos announced that their plan will have 2.7 billion capital investment in Northern Europe.

One of the things to watch in the future and the question for all is; where will the new Ineos plant be built. According to news articles both Rotterdam and Antwerp are being considered. As Ineos already has production sites in Antwerp we give Antwerp a slightly bigger chance, but you never know what the outcome will be. Either way it is likely to boost trade in ARA, as Ethane and propane imports will increase and most likely chemicals and intermediates trade will also increase.