Rosemount Tank Gauging - Emerson Process Management

2008 Review

A successful conference and exhibition highlights the interest in Ceyhan as an emerging strategic storage hub

Tank Storage Istanbul's unique event in Istanbul attracted the likes of Delta, Tüpraş, Lukoil, Vopak, BP, Shell, and Oiltanking, all wanting to learn more about the emerging region.

The event coincided with Vopak’s announcement of plans for a new storage terminal in Turkey so unsurprisingly speakers were faced with a packed conference room.

Key speakers included Mehmet Habbab, chairman of Delta Petroleum Products, Firat Yemeniciler, managing director of Poliport, Batuhan Onur, supply manager of BP Turkey and Deniz Hifizi Uzel, terminal operations manager at Petrol Ofisi, to name but a few.

The morning sessions of the first ever dual language event focused on Turkey’s position as a strategic and regional oil and petrochemical hub in the Mediterranean.

Throughout the event, the Ceyhan region was described as the next big terminal hub – the next Rotterdam – but it has a long way to go yet.

Ceyhan’s current storage capacity is 3 million tonnes, yet a storage hub requires about 30-40 million tonnes.

One of the largest obstacles terminals must overcome, explained Delta’s Habbab, is that Ceyhan lacks a large amount of infrastructure. Investors looking to move into the region have to install their own water and electricity supply, which is a lengthy process, and can take up to 1-3 years. In Rotterdam, this can be done in six months.

The cost of land is also rapidly increasing, so Habbab strongly encouraged delegates to invest sooner rather than later.

Other challenges the region faces include stringent government regulations, which delay vessel turnaround time.

Another hot topic at the event was increasing the country’s strategic stocks. Under new Turkish regulations that are expected to be passed soon in order to harmonise standards with the EU, a 90-day fuel reserve will be required.

Around 8-9 million tonnes of capacity is needed for this, which will further stimulate investment in the region.

Ceyhan may also hold strategic stocks for other countries in the future. The practice of strategically using foreign countries for storage is not uncommon. South Korea, for instance, keeps stocks in Norway.

Strategic stocks are kept not only in order to adjust for increases in seasonal demands, but also in order to confront any threats to energy supplies. In 2006, for example, when Israel attacked Lebanon, the first target was the storage facilitates.

Another drawback of the Ceyhan region, as one speaker pointed out, is that it is surrounded by very shallow water. At the moment ships of 150,000 tonnes must berth 2km out to sea, so jetties to connect these to onshore terminals can prove very expensive.

The costs are estimated at around $1 million (€0.79 million) a metre, so one jetty can cost up to $200 million to build. The way round this is to encourage interconnectivity, so terminals share the cost of these jetties.

But despite these drawbacks, speakers remained positive about the region’s future, and one even estimated that Ceyhan may exceed the capacity of Rotterdam in the future.

The hub is likely to serve as a transit hub, rather than just the local market, and is ideally located to support the Balkans, Syria and Lebanon, among others.

By 2020 it is estimated that there will be 450 million tonnes of product coming in and out of Ceyhan and the bunker business will be in excess of 5 million tonnes a year within 5-6 years.

Turkey was not the only country discussed at the event. Many delegates also brought up possible competitive hubs in the Mediterranean, such as Malta and Gibralta.

However both these countries have thriving tourist industries, which could be at risk from any potential storage accidents, and hindered by the appearance of a terminal.

Afternoon conference sessions moved away from strategic issues and onto technical subjects, such as the future of tank gauging, biological tank cleaning and the need for flame arrestors. These attracted engineers from nearby terminals, wanting to learn more about the industry.

The two day conference was accompanied by an exhibition showcasing the latest technologies from tank inspection to coatings and from tank roofs to gauges.

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