By Jean Christou
Netherlands-based global oil terminal company VTTI, whose €300m fuel storage facility at Vasiliko was officially inaugurated on Friday, is eyeing Cyprus for further investments, the company’s CEO Rob Nijst said.
The VTTV Vasiliko terminal consists of 28 tanks, with a total capacity of 544,000 m3, a 1.5 km-long marine jetty and four berths that can accommodate vessels from 5,000 up to 160,000 DWT.
Parent company VTTI B.V., based in Rotterdam owns and manages 12 oil terminals on five continents, with total capacity reaching 8.5 million cubic metres.
“We are convinced that the decision to invest around €300m in Cyprus will prove to be a great investment longer term,” said Nijst during the inauguration, which was attended by President Nicos Anastasiades.
“It is not a secret that we are continuously evaluating further investments in Cyprus. These may relate to the expansion of this terminal and other energy projects,” Nijst added.
“The main reason for this is that Cyprus has a truly advantageous geographic position to become a regional energy hub. With large refineries being built in the Middle East, the market expects more vessels’ traffic moving oil products through the Suez Canal bound for the Mediterranean markets, and such cargoes will need to be re-sized at a convenient oil terminal to meet regional requirements.”
He said VTTI was linked to an international energy network which would help to bring more energy investments to the island.
Nijst said that until now, Malta was the main turning circle in the Eastern Mediterranean for oil flows to Lebanon, Egypt and Turkey. In addition, significant quantities were in floating storage on vessels in the open sea in the Mediterranean, which could be a major risk for the environment.
“We believe that Cyprus and VTTV are in a position to become a more competitive and safer option,” Nijst said.
“Not only do we look forward to attracting regional flows into Cyprus, but VTTV will also constitute an alternative gateway to supply Cyprus’ domestic market for existing and new players.”
This, he said would result in increasing competition for the benefit of the consumer. It would further work as a catalyst for the country’s growth which requires lower energy cost to be supported.
“Already, and as a result of VTTV’s operation, the storage cost for the Republic’s strategic reserves has been reduced significantly and their relocation from Larnaca has been achieved,” he said.
Nijst said the message was that Cyprus has promising prospects and would have a key role going forward.
In his address, Anastasiades said the VTTV project was an important part of creating a wider energy hub.
“Our plans are ambitious. The developments planned in the Vasilikos area concern gas storage facilities and petroleum storage terminals with the aim of moving the facilities from Larnaca as well as the storage of the Republic’s national stocks,” he said, adding that the area could also be used when it came to natural gas reserves.
“This terminal constitutes the springboard for development in the Vasiliko area and it is the largest private energy project ever constructed in the Republic of Cyprus until now. It is a pioneering project since it is the first project of its kind, built in our region, aimed at transit trade,” the President said.
He said due to its strategic location, the terminal connected the markets of Europe and the Black Sea with those of the Middle East and Asia and its significance for the wider region becomes more salient due to the operation of large oil refineries in the Middle East and also the deliberations that are taking place for upgrading the Suez Canal so as to allow ships of larger capacity to pass by this strategic naval passage, he added.
It had also helped overcome a longstanding problem in Larnaca, referring to oil facilities which had been contributing, for decades, to the undermining of the city’s coastal front.
The government concluded a three-year agreement with VTTV for the rental of storage space to maintain and manage the national oil stocks that are being kept at the Cyprus Petroleum Storage Company’s facilities.
“It is important to say that the cost of storing the national stocks in these facilities will remain at the same level, while, at the same time, an opportunity has been created to repatriate the reserves we kept abroad, securing a strategic advantage in case of a sudden energy crisis,” Anastasiades said.
Addressing the issue of nearby communities who are concerned over the closeness of an energy hub to their villages, and the safety aspects, Anastasiades did not address these concerns but said the communities would in fact “enjoy significant benefits” from the stimulation of the local economy as well as from the creation of jobs, both in the construction phase of the projects as well as in the stage of their operation.
He also said the cabinet had approved a series of compensation measures for the benefit of the eight communities in the area. “The project, we are inaugurating today, constitutes an economic achievement for Cyprus… in periods of economic recession, projects of such magnitude are rarely if ever executed. But the VTTV company’s Terminal for the storage and management of petroleum products… is here and in operation, reminding everyone that Cyprus is not only standing on its feet but will move forward and reach the success it deserves.”