Fujairah, which hosts the Middle East’s largest commercial storage capacity for refined oil products, on Sunday appointed S and P Global Platts to distribute the Emirate’s weekly inventory data starting in early 2017 as part of its effort to position the Indian Ocean port-city as a global oil trading and storage hub.
The Fujairah Oil Industry Zone (FOIZ) and S and P Global Platts signed a Memorandum of Understanding (MoU) in which the independent data agency was awarded the mandate to distribute weekly inventory storage data and support the emirate in its outreach to those outside the Gulf region without an appreciation of Fujairah’s ever-growing capabilities.
The published data will include an aggregate breakdown of fuel oil, middle distillates and light ends.
Visibility provided by regular and publically available data is a key ingredient of successful liquid trading centers around the world. Publishing data reduces market opacity and enables traders and investors to see opportunities and risks more clearly, thus enabling them to develop cohesive risk-aware strategies and ultimately lock in greater profits.
The Fujairah Oil Industry Zone recently established the Fujairah Data Committee, known as FEDCOM, to collect, verify and distribute inventory data to replicate the data sets that are provided in other global trading centers, such as Singapore and Rotterdam.
“S and P Global Platts is the leading independent provider of information and benchmark prices for the commodities and energy markets, and their partnership is another step forward in the right direction towards transforming Fujairah into a major global hub for the storage and trading of petroleum products,” Dr. Sheikh Rashid bin Hamad Al Sharqi, Vice Chairman of FOIZ and Chairman of Fujairah Culture and Media Authority, said today at the signing of the agreement with S and P Global Platts.
The idea of establishing a benchmark pricing index for the Emirate of Fujairah has been contemplated for many years, and is supported by a range of considerations that qualify the Emirate to be a regional pricing center for the petroleum products that are traded in the Gulf, he added.
The main advantage of Fujairah, he noted, is its strategic geographic location outside the Straits of Hormuz, while bridging the time gap between the East and the West. Furthermore, the vast amount of oil products stored and traded through Fujairah warrants the establishment of its own price benchmark which will add depth and stability to the regional and global markets.
“We are confident that the regular provision of inventory data by an independent third party will increase Fujairah’s level of transparency and credibility, which in turn will improve investor confidence and reflect positively on the Emirate’s storage and trading industry,” Dr. Sheikh Rashid added.
The UAE’s only emirate on the Indian Ocean, Fujairah, is accelerating its strides towards becoming a critical node on the international energy markets map. This is most evident by the Port of Fujairah’s continued infrastructure investment and the expansion of its capacity to process petroleum products, which now amounts to 100 million tons per year of crude oil and refined products. Fujairah is also maintaining its commitment to expand storage capacity in the Emirate, from the existing 10 million metric tons to more than 14 million metric tons over the coming few years. The majority of storage private companies operating in Fujairah are currently involved in projects to increase storage capacity, including VTTI, owned by the Vitol Group. Other projects underway include plant expansions by Fujairah Oil Terminal and Gulf Petrochem, and land allocation to Concord Crude Oil Terminal Company for a 1 million cubic meter crude and products storage terminal.
“We are honored to be chosen by Fujairah to be its partner as it takes the next steps in its development towards its destination as a global trading hub,” said Dave Ernsberger, Head of Energy Pricing, S and P Global Platts. “Fujairah 2.0 is a very timely initiative as there is growing demand to see the Gulf’s trading ecosystem develop, as the region’s domestic downstream markets report some of the strongest growth figures in the world.” Founded in 1909, S and P Global Platts provides insights to help customers make better informed trading and business decisions with confidence. The company is the leading independent provider of information and benchmark prices for the commodities and energy markets. With over 1,000 people in more than 15 offices worldwide, customers in over 150 countries look to S and P Global Platts expertise in news, pricing and analytics to deliver greater transparency and efficiency to markets. S and P Global Platts coverage includes oil and gas, power, petrochemicals, metals, agriculture and shipping.