Brooge Energy Ltd. expects new tanks at its oil-storage terminal in the United Arab Emirates to be fully operational by the end of the year, with a single customer booked to lease all the additional capacity.
The US-listed storage operator is adding eight tanks at the site in the UAE port of Fujairah, boosting capacity by 3.8 million barrels of crude and refined products. The importance of adequate oil storage was brought sharply into focus this year as the coronavirus pandemic wiped out fuel demand, leaving tanks around the world brimming.
Brooge will have 1 million cubic meters, or 6.3 million barrels, of storage capacity in total after the phase-two expansion is completed. A planned third phase -- raising the total to 4.5 million cubic meters -- should be complete in late 2022, according to the company, which is in “advanced negotiations with a potential customer to lease the extra capacity.
Storing crude and fuels gives traders options to hold supply until it’s needed or keep products on the expectation they’ll be worth more later.
Brooge also plans to build a 25,000-barrel-a-day refinery to produce low-sulfur fuel oil. The plant is set to be operational in the third quarter of 2021, the company said Tuesday in a statement.
Brooge reported a 2019 loss of $77 million, compared with a $16 million profit in 2018, according to the statement. The company took a $102 million charge related to the cost of its New York listing last year. It reported record revenue of $44 million, and expects that figure to rise this year with the start of the new tanks.