Category: Tank terminals

Changing biofuels regulation and the impact on terminals

The biofuel component in gasoline and diesel has been increasing slowly but surely since 2003, but changing biofuels regulation over the next few years are set to have a strong impact on tank terminals.

Tank terminals have been instrumental in facilitating the rising popularity of biofuels in the European Union. The first EU biofuels directive—to promote the use of biofuels and other renewable fuels for transport—entered into force in 2003 and set a voluntary blending target of 2% in 2005. The biofuel component in gasoline and diesel has been increasing slowly but surely since then, but changing biofuels regulation over the next few years are set to have a strong impact on tank terminals.

In November 2016, the European Commission published its ‘Clean Energy for all Europeans’ initiative. As part of this package, the Commission introduced an updated version of the Renewable Energy Directive, which defines a series of sustainability and GHG emission criteria for bioliquids. After the EU member states reached an agreement on this proposal in December 2018, the Renewable Energy Directive II (RED II) officially entered into force.

In RED II, the overall EU target for sustainable energy sources by 2030 has been set to 32%. While the Commission’s original proposal did not include a transport sub-target, the final agreement stipulates that the Member States must require fuel suppliers to supply a minimum of 14% of the energy consumed in road and rail transport by 2030 as renewable energy. Fuels used in the aviation and maritime sectors can opt in to contribute to the 14% transport target but are not subject to an obligation.

Currently, most member states are not meeting their individual targets. However, considering that the directive has to be transposed into national law by the Member States by 30 June 2021, the European Commission will soon be legally equipped to enforce the directive.

For tank terminals, this will mean a substantial shift in blending demand. Traditionally, bioethanol consumption depends on road gasoline consumption, which is expected to decrease. However, due to higher blending mandates, ethanol demand is expected to grow. Likewise, biodiesel consumption is strongly correlated to road diesel consumption.  Although diesel consumption is also expected to decrease, due to higher blending mandates we expect the demand for biodiesel to grow as well. The maximum percentage of first-generation biofuels is capped at 7%, while the rest should be an advanced / next-generation biofuel 

So while we expect the net demand for gasoline and diesel to decrease due to a variety of factors (economic recession, electrification of passenger cars and cargo vans, work-from-home), the higher blending mandates will create strong growth in demand for respectively bioethanol and biodiesel. This will offset the decline in fossil fuels and increase the demand for tank terminal blending for tank terminals.

The Renewable Energy Directive II and its impact on the fuel market make it crystal clear that biofuels should be on the radar for every tank terminal operator. During our regular Market Update webinars, we offer our expert outlook on supply, demand, and trade flows and its impact on tank storage demand.

Do you want to make sure that you never miss out on important market updates? Sign up for the next webinar today, so that you are better prepared for what tomorrow will bring.

Covid-19 and the impact on the Market Outlook and Oil terminals

Even though the Covid-19 pandemic is still in full swing, it is safe to say that the corona-virus has had a profound impact on nearly every aspect of our daily lives. Besides the more visible effects on public health, society, and transportation, Covid-19 also sent a shockwave through the global economy. 

Even though the Covid-19 pandemic is still in full swing, it is safe to say that the corona-virus has had a profound impact on nearly every aspect of our daily lives. Besides the more visible effects on public health, society, and transportation, Covid-19 also sent a shockwave through the global economy. 

This economic shockwave also had its effects on tank terminals: As soon as the true scope of the Covid-19 pandemic became apparent, the oil market shifted from a backwardated market into a deep contango. Needless to say, this contango immediately led to a significant increase in demand for tank storage. Currently, the commercial occupancy rates at oil tank terminals are very high, and as a result, tank storage rates have increased by 20-30%.

This presents a somewhat unique situation for the tank terminal market. On the one hand, high occupancy rates and increased tank storage rates have a very positive impact on the short-term profitability of oil terminals. However, the consumption of oil products has seen a sharp decline and will takes years to recover fully.

What will this mean for the tank terminal market? At Insights Global, we continuously calibrate our Advanced Tank Terminal Market Model against shifts in the market. Our algorithms take into account macroeconomic trends like oil prices, taxes, trade costs, and interest costs, and (petro)chemical factors like trade flows, logistics, and storage rates. Based on the latest economic developments, we have also incorporated the Corona effect in our forecasting models.

Even though the V-shaped consumption curve (sharp decline followed by a sharp increase) for oil products seems already behind us, we expect it will take five years for consumption levels to normalize fully. Jet-kero consumption is hit especially hard by the Corona-crisis, with an initial reduction of up to 95%. This slow recovery is not only caused by the impending economic recession, but also by the change of habits like working from home and replacing in-person meeting by online meetings.

While the current focus is – understandingly so – on the impact of Covid-19 on the oil market, other essential factors like the electrification of road transport, reverse dieselization of European passenger cars, and IMO 2020 regulation for bunker fuels will also play a key role in the tank terminal market. Naturally, the impact of these events is also incorporated in our Advanced Tank Terminal Market Model.

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Tank Storage Demand Drivers – Arbitrage

Geographical price differences will lead to increased trade! In this article we would like to highlight the subject arbitrage and what this theme has for impact on the tank storage market.

Introduction arbitrage economics

In theory (Investopedia), arbitrage is the simultaneous purchase and sale of an asset to profit from a difference in the price. It is a trade that profits by exploiting the price differences of identical or similar positions on different markets or in different forms. Arbitrage exists as a result of market inefficiencies.

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But how does this work in practice? As commodity trading firm Trafigura describes on their website, they apply three forms of physical arbitrage:

1 – Geographical arbitrage identifies temporary price anomalies between different locations;

2 – Time arbitrage seeks to benefit from the shape of the forward curve for physical delivery (see our article on market structure); and

3 – Technical arbitrage seeks to benefit from the different pricing perceptions for particular commodity grades and specifications

In this article and to make things clear we will focus solely on geographical arbitrage and in particular the Northwest European Singapore arb for heavy fuel oil. 

In order to calculate heavy fuel oil’s price difference between Northwest Europe or ARA and Singapore, we compare the FOB ARA spot price with FOB Singapore swap price, second month due to the duration of the voyage. The difference between these values is the spread and should be large enough to cover the trade costs.

On most occasions heavy fuel oil is shipped to Singapore in a VLCC (Very Large Crude Carrier/310 kt DWT) and loads approximately 270 kt of product. We therefore sum the VLCC freight rate, finance costs, port costs, inspection costs and demurrage to come to total trade costs. Should the spread be more than the trade costs the arb between both regions is open. When the spread is less than the trade costs the arbs is closed.
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Importance of arbitrage for tank storage companies

So monitoring if arbs are open (or closed) is a good indication, to understand if trade between two regions is likely to increase. A positive trading environment, ultimately will influence tank storage dynamics.

Please note that arbitrage cannot be seen as a single indicator for business opportunities for tank storage companies. Other indicators that should be taken into account are: price volatility, market structure, and more. These subjects have been highlighted in other articles.

Source: www.trafigura.com

Tank Storage Demand Drivers – Market Structure

The market structure stimulates traders to buy now and sell late. In this article we would like to highlight the themes contango and backwardation and what market structure means for tank storage operators.

Market structure – Introduction to contango and backwardation

An oil price for immediate delivery is called spot price or cash price while an oil price for delivery at a specified date in the future is called a forward price. When we plot these various prices and order them from short to long term delivery, a forward curve is created.

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When a futures price (second month) is below a futures spot price (first or front month), the market structure is in backwardation. In this case, the forward curve is downward sloping. When the futures spot price is below the futures price, the market structure is known as contango. In this case, the forward curve is upward sloping.


Figure 1: Forward curve ICE Brent crude futures

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A contango usually occurs when supply is higher relative to demand (supply glut) while in a backwardation demand is higher relative to supply (shortage). As time evolves, an oil forward curve can switch from backwardation into contango as in the case of the NYMEX RBOB futures forward curve. When a cyclical pattern is visible, this is called seasonality.

With respect to NYMEX RBOB futures, US gasoline prices tend to rise towards summer driving season during the period June and September. In the period before peak demand, oil traders tend to buy and store products to have product available in times of high consumption.

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Importance of market structure for tank storage companies

In a period of contango, oil traders are encouraged to buy oil products today and sell in the future when the spread between two months covers storage, shipping and finance costs. When this opportunity presents itself, product is being sold, shipped and stored, resulting in more business for tank storage companies. This play is known as a ‘contango storage play’ but is limited by the maximum tank storage capacity available.

In some rare occasions, when the time spread is large enough even tanker vessels are chartered by trading companies to store oil products. This is known as floating storage. In this rare environment demand for tank storage is high and pushes storage rates for spot availability. Backwardation discourages storing oil products as a trader can sell oil today at a better price than in the future.

Is market structure the only business opportunity indicator for tank storage companies?

There are other indicators that should be taken into account such as price volatility, arbitrage and more. These topics and Insights Global’s market model will be covered in upcoming weeks.

Learn what drives tank storage demand. Join the FREE Webinar: Insights Global Tank Terminal Commercial Performance Model upcoming March 18th 2020.

Tank Storage Demand Drivers – Price Volatility

Volatility is applied to describe fluctuations of oil prices and it relates to the level of uncertainty in the market. Historic volatility is calculated by the standard deviation of an oil price return series, measured during a certain time frame

Introduction to Price Volatility

Price volatility will stimulate traders to buy low and sell high. In this article you will learn about it and how it influences demand for tank storage.

There are other ways to calculate volatility i.e. looking at the daily high and low range of oil prices during a trading session or the estimated volatility of an option (implied volatility). Implied volatility offers an outlook on the expected volatility and is the opposite to historic volatility that looks back into recent history. It is important to understand that there are events that can impact the level of price volatility.

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Figure 1 Brent crude price and price volatility

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When analyzing the Brent crude price and periods of high volatility there are a number of time frames when crude futures prices dropped while volatility expanded. Like on January 8 (weaker geopolitical risk premium), and February 3 (worries of Corona to demand for oil).

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Importance of price volatility to tank storage companies

Important for tank storage companies to understand is that in times of high volatility, such as described in these three cases, trading volumes on the paper market are very high. As traders are able to make bigger profits in a high volatile regime when an old saying become reality: ‘buy low and sell high’. 

Taking into account that every paper position is squared by a physical position, one can understand that also physical trade will increase. More physical trade will eventually lead to more demand for tank storage capacity. 

Is price volatility the only business opportunity indicator for tank storage companies?

There are other indicators that should be taken into account such as market structure, arbitrage and more. These topics and Insights Global’s market model will be covered in upcoming weeks.

Learn what drives tank storage demand. Join the FREE Webinar: Insights Global Tank Terminal Commercial Performance Model upcoming March 18th 2020.

Source: Grimes, A.H., Trading Volatility Compression, 2014

Global tank terminal markets: current status and outlook

To say that the global tank terminal business is large is an understatement. There are more than 4900 tank terminals comprising more than 1 billion cubic meters of storage capacity. The business has grown at a compounded annual growth rate of 3% since 2005 and in coming years another 10% will be added to global tank capacity. Some might argue that capacity has grown too fast and that we are approaching a situation where markets are ‘over-tanked’. But is this really the case? This is a very relevant question for many players. For instance, if you are a business development manager at a terminal operator you need to understand this because it can guide you in determining if and where to invest. Another example are investors. If you are an investor in infrastructure assets you need to understand this in order to decide on investing or divesting in and valuating terminal assets.

So understanding the balance between supply and demand for terminal markets is very important for many people. One thing to keep in mind is that terminal markets are on the one hand very local in nature but on the other hand these markets are driven by global factors such as trade flows and commodity price dynamics. This makes these markets rather complex. Nevertheless in this article we will try to shed some light on this topic in order to unravel this complexity. We will take the approach to focus on how tank terminals are used by their clients and how this adds value to these clients. To support this approach we will use INSIGHTS© GLOBAL’s model on terminal functions.

  • Logistics/hub function
  • Trading platform
  • Strategic storage

Every terminal essentially has a logistics or hub function. This is the prime function. Some terminals are also used as a trading platform by its clients. Physical commodity traders require terminals for their business model. The last function a terminal can have is to store crude or oil products as part of a country’s strategic petroleum reserves. This last function is interesting for a specific terminal operator but from an economic analysis point of view less relevant because it is dependent on specific policies defined by governments. We therefore leave this function outside of the scope of this article.

So we will focus of the logistics and trading platform functions. After careful analysis of these functions and the value it can bring to clients of terminals we concluded that there are three key factors that act as business indicators for tank terminal markets:

  • Commodity price dynamics
  • Inventory levels
  • Trade flows

If you are analyzing business at a specific terminal you need to look at these factors in the local context. However, for the purpose of this article we have looked at these factors on a global scale and we have focused on oil markets.

Oil price dynamics

Current oil price levels are low and rather volatile. The low price levels stimulates demand and the increased volatility creates trading opportunities. The forward curve is downward sloping (backwardation) which weighs on arbitrage opportunities. However, some institutions like the EIA are forecasting a slight oversupplied global crude market, which could soften the backwardation or even flip it to a contango, which would be good news for the terminal sector.

Inventory levels

Global crude and oil product inventories are on the lower end. This is related to the backwardation price structure. So tanks are slightly underutilized right now.

Trade flows

Global crude and oil products trade flows have been increasing at a steady rate in the last decade. This rate resembles the growth rate in tank capacity and thus signals that the balance between tank capacity and tank demand is more or less balanced. This is a very positive sign.

The main conclusion from the above analysis is that the global market does not seem to be over-tanked and that the current situation is set to improve significantly after oil price dynamics change to fully support the terminal business. So the future is definitely bright for the terminal business!

About the author

Patrick Kulsen is Managing Director and Senior Consultant at INSIGHTS GLOBAL, a market research company specialized in oil and petrochemical markets. The company’s consultancy team has successfully helped clients with research and commercial due diligence projects for many years. For more information on our consultancy services please follow this link.

6 things terminal operators should know about their competitors

The tank storage industry is a very competitive market and it brings many challenges to its players. Tank terminal operators for liquid bulk are facing both internal and external factors that can affect the efficiency and the progress of their business.

A few internal factors involve the company’s organization, processes, availability and infrastructure, etc. Terminal operators can be also challenged by external factors, such as competition, regulations and the economy. With more than 7,040 tank storage facilities worldwide, it can be very tough for storage operators to position themselves in the market.

What exactly do terminal operators need to know in order to face their competition?

1 Location

Location for terminal operators is key for the success of their business. Before starting with any terminal construction project, a lot of thought is put into the geographical location of the terminal. In order to analyze the location, a storage operating company needs to have insights on all other players that are active in that area. Besides other factors, analyzing the competition in a certain area can indicate if it is viable to invest in a project.

If a terminal operator already has an existing terminal in a certain region, it is important to know the neighboring competition. Who are those terminal operators? What is their market share? What cargo types do they support? What is the infrastructure of those terminals? All these are a few crucial questions, that terminal operators should ask themselves.

2 Market share and total storage capacity

Another important factor for a terminal operator is to know the largest storage players in the region. This gives the ability for a terminal operator to analyze his/her position in the market and at the same time understand the power of their competition.

How can they easily determine the market share of their competitors? For example, if a terminal operator is interested in Barcelona Port or has an existing terminal in the port, they can look at the total storage capacity of all the terminal operators. In the image below it can be seen how insightful market share is when identifying the biggest players in the port (the market share is drawn from the total capacity of each terminal in the port).

3 Cargo types

For terminal operators it is important to know what cargo types their competitors are able to store. This gives an opportunity for them to create diversity and flexibility in product storage at their terminal. In today’s storage industry, the clients of storage operators see diversity and flexibility as an added value. Thus, there are a few important factors that a terminal operator needs to analyze:

  • Demand in that region
  • Production in that region
  • Import and export flows
  • Imbalances
  • Storage availability in that region

4 Different terminal functions and access modes

A tank terminal can have the following functions:

  • Strategic storage
  • Logistical storage
  • Import/Export
  • Trading hub

These four different terminal functions create different level of competition for terminal operators. Tank terminals that are located in the same trading hub and that are providing the same storage services are in direct competition. A strategic storage that is located next to a logistical storage might not be in direct competition, but terminal operators should still thoroughly analyze the level of competition.

The function of a terminal can also dictate the access modes for a terminal. Terminals can have the following access modes: sea, rail, road, pipeline and barge. A terminal with more access modes can be connected with different international trading markets and provides more options and flexibility for its potential clients.

5 Planned investments and expansions

Terminal operators need to know if there are any new projects or planned expansions in their region. A new terminal can mean stronger competition while a new expansion creates more power to an existing competitor. If terminal operators are aware of the new changes and are properly informed, they can better understand how to face the new challenges.

As the competition is significantly increasing, especially in port areas, terminal operators need to constantly evaluate their infrastructure system and consider expansion possibilities.

What should a terminal operator know about a new project/expansion:

  • Which company is it and what is their market share?
  • What will be the total added capacity for an expansion or what will be the total capacity of the new terminal?
  • When will the project be completed?
  • What products will the terminal be able to store?
  • What access modes will the terminal have? 
  •  

6 Logistical performance

A very important factor for marine terminal operators is to analyze the logistical performance of their competition. This includes the following operations:

  • Throughput
  • Berth occupancy
  • Average visit duration
  • Tank turns

 What does the logistical performance measure?

It determines the productivity and performance of a certain terminal. For a terminal operator, it is a good indicator if the competition is underperforming.

Conclusion:

The six factors mentioned in this article are very good indicators and analysis tools that a terminal operator can use in order to determine the efficiency of its terminal. And also to create a plan in order to improve the market share of the terminal. Nevertheless, besides these six factors there are many other factors that can help to evaluate the competition and were not mentioned in this article.

If you are a terminal operator have you thought about these factors?

  • Product handling efficiency
  • The performance of your equipment
  • Storage capacity
  • Multi-channel transportation system

The hottest terminal locations of 2020

In the world of international tank storage, thousands of terminals give access to commercial storage. These terminals are located all over the world. From large tank farms in oil trading hubs in ARA, USGC, Fujairah and Singapore to small depots on Guam or Greenland.

The tank storage sector is not a static industry but a dynamic one which grows every year. It is interesting to find out which regions have the most investments planned or are currently building new additions.

In picture 1 can be seen where the largest concentrations of tank terminals are.

The world’s hottest storage hotspots

Estimates are that global tank storage capacity will grow 8% to 1.03 billion cbm in 2020 and even 11.5% to 1.06 billion cbm in 2021.

When ranking the regions with the largest total tank capacity in 2019 the following list can be produced: 1) Asia (360Mcbm), 2) Europe (235Mcbm), 3) North America (191Mcbm), 4) Middle East (50.8Mcbm), 5) South America (45.5Mcbm), 6) Africa (43.6Mcbm), and 7) Oceania (4.4Mcbm).

In 2020 the ranking is as followed: 1) Asia (383.7Mcbm), 2) Europe (244Mcbm), 3) North America (207Mcbm), 4) Middle East (93.3Mcbm), 5) Africa (48.9Mcbm), 6) South America (47.8Mcbm), and 7) Oceania (4.7Mcbm).

Analyzing this list some remarkable conclusion can be taken:

-The Middle East will show the strongest growth rate with 84% in 2020 as capacity in this regions grows from 50.8Mcbm to 93.3Mcbm;

-Africa will leapfrog South America and take position 5. This continent shows a growth rate of 12%. Storage capacity increases from 43.6Mcbm to 48.9Mcbm.

-Europe will grow by 4% till 2020 and is the slowest growing region of all the 7 regions. Capacity in this region grows from 235Mcb to 244Mcbm

Although, looking at regions is sort of looking at it as from a macro-level perspective, we can well say that the Middle East will be the hottest tank terminal location in 2020. There are some interesting locations in the Middle East that have a substantial part in the additions in this region.

Fast growing areas in the Middle East

Oman Tank Terminal in Raz Markaz

In Oman storage of oil liquids is concentrated around the ports of Salalah, around Oman’s capital Muscat and Sohar’s industrial area. Oman’s government owned investment company OOC, Oman Oil Company announced a major investment in 2012 on building a massive 31Mcbm crude storage facility in Ras Markaz. Some 200 tanks will be added. Estimates are that this terminal will be operational as from June 2019. With this investment Oman is trying to develop its position as an important global trading and storage hub.

South Oil Company in Iraq

Roughly said, Iraq has storage facilities in its oil fields in the North, around Kirkuk, Al Anbar and Erbil and in the South, around Basrah. Most of these terminals are controlled by the Ministry of Oil of the Republic of Iraq. Government-owned South Oil Company will add 2.78Mcbm of crude capacity in Al Zubair and another 0.464Mcbm in Fao. For the first addition applies that some 489 crude tanks will be built. December 2019 has been pointed as data of operation. For the latter, applies that 5 tanks will be built and this expansion is planned to become operational in December 2020.

Jask Oil Terminal in Iran

In Iran, storage facilities are controlled by state-owned Iranian Oil Terminals CO. These terminals are mostly located at the Persian Gulf and the gulf of Oman, connected with each-other by the infamous Strait of Hormuz. Not in the 2019 and 2020 numbers but definitely worth mentioning is the 10Mcbm crude addition in Jask. Jask is peninsula that runs into the Gulf of Oman. The Jask Oil Terminal will include 20 tanks with floating roofs. he terminal will also include loading and unloading wharves, offshore facilities including three single-point mooring (SPM), and other infrastructure for import/export oil. Estimates are that this addition will be active in December 2021.

The data for this article was gathered with the support of tankterminals.com’s database platform. With only a few clicks and couple of seconds the information of the biggest market players in the various regions was obtained.

For more information, contact:
Jacob van den Berge, Head of Marketing & Sales Insights Global

Who are the biggest players in the tank terminal market?

In the global commercial tank storage industry thousands of terminal operators are active. Without taking a terminal operator’s specific function, it is interesting to learn who the biggest players are in the international tank terminal industry.

In picture 1 can be seen where the largest concentrations of tank terminals are.

Looking on a global level the following top 10 terminal operators can be derived. See table 1.

Rank

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Head office

Sinopec

Vopak

CNPC

Kinder Morgan

PetroChina

Buckeye

Oiltanking

Marathon

Enterprise

Magellan

# of terminals

51

69

24

96

34

114

73

99

55

93

Capacity

44.1Mcbm

33.1Mcbm

25.7Mcbm

21.7Mcbm

19.8Mcbm

18.1Mcbm

17.6Mcbm

16.7Mcbm

13.2Mcbm

13.1Mcbm

As can be seen in this list, based on total capacity, the biggest players are located in China with Sinopec, CNPC and PetroChina, followed by US with Kinder Morgan, Buckeye, Marathon, Enterprise and Magellan and Europe with Vopak and Oiltanking. With a combined total capacity of 223Mcbm, the top 10 players cover around 21% of the total capacity globally.

A bit more details on the three biggest storage operators

Sinopec Group, Chinese dragon at the top of the food chain

Sinopec Group, China Petroleum and Chemical Corporation, is a Chinese energy company based in Beijing (China). It is the second largest oil producing company after PetroChina. Besides 50 terminals (with a total storage capacity of 44Mcbm, mostly located in China) and 30.000 petrol stations, this company operates dozens of refineries, around half of the Chinese refinery capacity. Sinopec has various listings on stocks exchanges but for the majority the shares remains in the hands of the Chinese government. In 2017, total revenues was around €300 billion.

Vopak, Dutch giant with a global storage print

Vopak is an independent storage player with a long history dating back to the early 16the century. Independent means it does not own the oil products its stores. It therefor holds an independent position in the market unlike for instance Sinopec and CNPC, the number 1 and 3 in the list. The 69 terminals of Vopak are scattered around the globe. It has locations in more than 20 countries with largest concentration of terminals in the Netherlands, followed by China and the US. In 2018, Vopak’s revenues lay at €1.25 billion.

China National Petroleum Corp, a powerful energy emperor

CNPC is a one of the biggest vertical integrated oil companies in the world. Its origins date back to 1949 when communist China was formed. The company rose from Ministry of Petroleum which secured and managed the country’s fuel. It operates oil assets in more than 30 countries, except for the 24 storage terminals (with a total capacity of 25.7Mcbm) which are mainly located in the Chinese homeland. In the downstream area it also operates more than 20.000 petrol stations.

Are storage capacity market shares equal across the globe’s regions?

Is the global division of market shares similar for the different regions? Absolutely not. Let us analyze the regions with the largest concentration of terminals. The regions with the most terminals are the United States (1.447), Europe (1,125) and Asia (1.057).

In the United States, the tank storage is dominated by publicly owned storage operators with US origins. The top three consist of 1) Kinder Morgan, 2) Magellan and 3) Buckeye. The remainder of the top 10 consists only out of US-born tank storage players.

In Europe, the top 3 biggest players are 1) Vopak, 2) Oiltanking and 3) CLH. These companies are also publicly owned and have a broad international coverage which means they have a global storage footprint. For instance Vopak is ranked number 6 in Asia and Oiltanking is ranked number 12 in Asia.

In Asia the top 3 consist solely of Chinese state-owned companies: 1) Sinopec, 2) CNPC and 3) PetroChina. Their number four is a Japanese company, JX Nippon Corporation and the number five as the Korean Gas Corporation. As mentioned before, ranked six is Vopak.

As can be concluded, the global players take a large piece of the pie. However, there is enough room for other tank terminal players to operate a sustainable business in specific regions, countries or ports. Furthermore, the competitive dynamics differ per region, so tank terminal players face different opponents in various regions.

The data for this article was gathered with the support of TankTerminals.com’s database platform. With only a few clicks and couple of seconds the information of the biggest market players in the various regions was obtained.

Market transparency in the Tank Terminal industry

The increasing of information stream due to digitalization and accessibility to information sources, has led to numerous debates in the oil markets. Refiners, traders, brokers, end-consumers and all other stakeholders within the industry need to cope with decision making on various levels and are therefore relying on certain proved sources in an industry which is full of closed doors and limited availability of information. Transparency in this market is therefore crucial to search and select the appropriate partners within the market and to make smarter business decisions.

Market transparency can be found in all different subjects within the oil and gas industry. Price setting agencies, transport and tank storage rates overviews and other statistical insights contribute to a level playing field, which can help the customer make the best decision possible. By obtaining instantly accurate information, one can reduce mainly costs, time and effort. Objective players in the oil and gas environment, help balance the markets by supplying vast amounts of data and information to all participants. Traders interpret the macro-economic data of NGOs, governmental institutions and central banks to weight their decisions and therefore depend on reliable information. Falsified or incorrect information can give individuals an edge and increases the costs involved for the other businesses.

Moreover, these objective market participants withhold fraudulent companies or individuals from entering and disbalancing the market. Associations such as, FERM Rotterdam (ferm-rotterdam.nl) provide insights over the fake suppliers of tank storage capacity, in order to limit the risks involved for other market participants. Individuals without proper knowledge of the markets, can easily become targets of these scams. Who is able to spot the differences when certain, legitimately looking, websites come across?

Websites about the same terminal in the port of Rotterdam, which one is legitimate?

For businesses entering the market, these organizations are key to a fruitful collaboration between suppliers and clients. In addition, these organizations show which websites, companies or individuals to bypass. Companies and terminals in the TankTerminals.com database are investigated by various database administrators before being added in the vast database of terminal details, characteristics, contacts and other relevant information. Data supplied by the terminals and the managers of the terminals is thoroughly checked before it is approved. The data is regularly updated and if possible expanded with more data to give a transparent overview on the tank terminals. This way, potential suppliers, customers and others interested have a quick go-to list which reduces the efforts of going through all kind of information. The completer the information in the terminal factsheets, the higher the reliability, legitimacy and opportunities to connect with the relevant contacts.

Market transparency is imperative in getting quickly the right information and with as little errors as possible. The oil and gas industry and its environment has been closed and constrained. However, it is rapidly changing in the digital age with the help of different organizations. The information, statistics and other relevant news can be supplied to the interested individuals and companies in order to get more insights, to make quicker and smarter decisions.

Author: Lars van Wageningen