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This Phase 3 of Horizon's construction will bring its capacity to 1.2 million cu m and the city's state's total to 7.5 million cu m, part of a flurry of projects to capitalise on growing fuel oil trade in Asia's top ship bunkering port.
However, troubled Mitsui Oil Asia (MOA) has terminated its lease agreement. MOA had been due to start occupying the 130,000 cu m of tank space in stages from next month, as the main tenant under Phase 2.
Asked about the termination, Hussein M Sultan, also group chief executive of Emirates National Oil Co (Enoc), said he was not concerned.
'I'm not worried at all. There are hundreds of people queueing for the tanks. There are many, many people waiting and many requests from customers for more space,' he said.
Major players such as Vitol, as well as Russian major LUKOIL -- which currently does not have landed storage facilities in Singapore -- are on the lookout for tankage.
MOA is the Singapore-based unit of Mitsui, Japan's second-largest trading house, which recently announced losses amounting to $81 million from naphtha trading.
When contacted, a Mitsui spokesman said: 'We are still negotiating the contract. We are committed to existing contracts and do not intend to cut off any contracts all of sudden.
'There is a possibility that Mitsui & Co. will take over the (tank) contract. MOA has withdrawn from all naphtha trading, including physical trade, but it is still handling fuel oil and crude. The facilities are necessary to handle physical trade.'
Mitsui vice-president Hiroshi Tada said last month that the company hoped to close its Singapore trading arm in April or May if possible, but remaining long-term contracts and other conditions had to be sorted out first.
Trading sources said chances of Mitsui & Co. taking over the lease were unlikely, adding that Horizon had been told it was free to market the tanks. But the firm has yet to decide whether to offer the tanks to its existing customers or to open them to the market.
Existing customers include US-based firms Cargill International and Koch Refining, South Korea's SK Energy, which is also a stakeholder, and Middle East trader DNK Petroleum, a joint-venture between Enoc and Kuwait's IPG.
Horizon's terminal started receiving cargoes in October, with Phase 1 of its construction due to be completed by the second quarter. This phase will see 840,000 cu m of capacity at a cost of $200 million.
Phase 2 will see another 110,000 cu m by the third quarter. New projects will double commercial capacity in the city-state by next year.
Two other new projects -- Singapore trader Hin Leong's Universal Terminals and Singapore-listed Chemoil's Helios facility -- are expected to be operational by end-2007.
Universal, when completed, will be the largest commercial storage facility in Asia with capacity of 2.3 million cu m, while Chemoil's facility has 450,000 cu m of tankage.
Existing commercial operators -- Royal Vopak, Oiltanking and Tankstore -- will each add about 200,000-250,000 cu m to their existing facilities by 2008.
Another 1.47 million cu m will be added by 2009 under Phase 1 of the Jurong Rock Caverns project, with another 1.73 million cu m slated for Phase 2.
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