Royal Vopak: Vast opportunities for independent storage firms in Asia LNG market

Royal Vopak: Vast opportunities for independent storage firms in Asia LNG market
Business & Markets 2013
Written by Bernama
Tuesday, 11 June 2013 19:26


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KUALA LUMPUR (June 11): Liquefied natural gas (LNG) will play a significant role in Asia's energy mix in the coming years, providing vast opportunities for independent storage companies to venture in this region.

Royal Vopak's Chairman of the Executive Board & Chief Executive Officer Eelco Hoekstra said there is a growing importance of LNG in Asia, especially taking into account the LNG policy in Europe and elsewhere aimed at ensuring a reliable, affordable and clean supply of energy.

"In that respect, natural gas has the potential to improve energy security in achieving economic goals and environmental performance in Asia Pacific economies.

"Asia's natural gas market — the fastest growing gas market worldwide — is expected to become the second largest by 2015," he said on the second day of the 17th Asia Oil and Gas Conference (AOGC 2013) here today.

Hoekstra said the region, with more LNG trading activities expected, would require continuous expansion of infrastructure, including shipping as well as regasification and hub terminals.

"The overall flexibility and liquidity will impact the market over the medium term and will slowly change the nature of the LNG business into a more liquid- and trading-oriented business model.

"Given these developments, we see it clearly as an opportunity for independent hub and import terminals for LNG," he said.

Hoekstra said the energy sector is the natural step for independent storage providers to venture into, from their traditional focus on oil and chemicals.

Clients could focus on capital investment and their core activities in other parts of the value chain, he said, adding an independent terminal would provide economies of scale which should make storage and independent terminals an attractive option whilst providing flexibility to clients.

"We believe there is significant merit in an independent model at the energy value chain as well," he said.

He said the increasing need for infrastructure development following increased demand and supply could further drive participation of independent storage companies.

Hoekstra was a speaker at a session on Asian LNG trends and the role of independent storage in the coming future.

Royal Vopak, which ventured into the LNG sector in 2011, is the world's leader in independent storage services in the oil, gas and chemical industry.

It currently owns and operates 84 storage terminals in 31 countries.

With the latest developments in the region in mind, Royal Vopak is keen to develop and invest in such facilities and serve the LNG industry in the region, as part of its LNG global business strategy, Hoekstra said.

Royal Vopak is one of the parties invloved in the RM5 billion Pengerang Independent Deepwater Petroleum Terminal (PIDPT) — a joint venture among Dialog Group of Malaysia, Royal Vopak and Johor State Secretary Incorporated (SSI).

CONSTRUCTION [] of Phase 1 of the project has already started and is scheduled for completion by the first quarter of next year, while Phase 2 land reclamation is in progress.

The total storage capacity at PIDPT is planned for five million cubic metres by 2020.