Oiltanking Malta handled 6.5 million cubic metres of products last year, about 60 per cent more than the the previous year.
"We handled 868 vessels in all. It was very hectic but this reflects the recent price fluctuations which were a real incentive for traders," chief executive officer Leddy Evangelista said.
The demand for storage has grown as the market has changed. In the past, for example, traders held oil speculatively until the price was favourable, a practice known as the "contango" market, but products now tend to come in and go out much faster.
Oiltanking currently owns over 20 tanks with a total capacity of 560,000 cubic metres, including new tanks inaugurated last year at a cost of €23 million.
Oiltanking Malta's parent company Oiltanking GmbH, part of the Marquard and Bahls group, operates 75 terminals in 21 countries, storing oil, petroleum chemicals and gas. The Malta terminal is its only one in the Mediterranean.
"When Oiltanking first came to Malta in 1990, the island was not on the map for this type of business and it was hard to persuade clients to consider it. However, our business development unit in Amsterdam, where Oiltanking has one of its largest terminals, helped to push business our way," she said.
"There was a time when the tanks were empty but they are now all rented out, whether for the medium or the long term. The leases are for approximately five years but as a result of high demand, we are getting requests for longer as clients want to ensure that they will have the capacity if and when they need it."
Oil companies offer different operating models, ranging from those that store their own oil to those who rent out spare capacity. Oiltanking Malta rents out capacity and not the tanks themselves, but more importantly does not own the product. These give it a lot more flexibility - while the fact that they are rented for years at a time means that it has a strong element of guaranteed revenue.
"It is a question of outsourcing. Storage is not the core business of oil and gas companies or of traders," Ing. Evangelista said.
Oiltanking Malta will next month start carrying out a jetty occupancy study to identify whether it is making the most efficient use of its four jetties in Kalafrana and how much additional capacity could be built.
Vessels unloading fuel for the local market might complete their discharge in hours while tankers could take days, which is why a jetty occupancy study is an important place to start: It is no use having more storage tanks if you do not have the space to handle the vessels. Also to be factored in is the fact that the vessels are getting larger; last year Oiltanking handled a 121,000 DWT vessel, the maximum it can cope with.
"The fact that we have a deep water jetty is a very important part of our competitive advantage as it gives the client the option of switching oil from large tankers to smaller vessels or vice versa. And being at the crossroads of the Mediterranean means we are offering a service to vessels on the main routes.
"In this business there are three important factors: location; location; location! Malta has them all."
If demand is growing that much, it only stands to reason that other countries might decide to open terminals of their own but Ing. Evangelista is not concerned about competition. In the first place, Malta has other advantages like legislation and a good investment climate; in the second, there is so much demand that another player would not affect Oiltanking.
"However, it is very important that we satisfy our clients' demands. Of course, if we had more tanks we would also be able to say 'yes' to prospective clients that we currently have to turn away," she said.
The Malta Freeport Corporation recently sold its 30 per cent shareholding in Oiltanking Malta, while Oiltanking GmbH also sold 15 per cent of its shares in Malta (as well as shares in Amsterdam and Singapore). The Maltese shares were bought by 3i Infrastucture Investment Fund of the UK, although operations are still in the hands of Oiltanking. The company has a 25-year lease on the land, renewable for two 10-year periods, for which it pays a lease to the government. The government also earns a fee on all throughput. Oiltanking Malta currently has 49 staff, with a state-of-the-art control room from where most of the automated processes are handled.
"We handled 868 vessels in all. It was very hectic but this reflects the recent price fluctuations which were a real incentive for traders," chief executive officer Leddy Evangelista said.
The demand for storage has grown as the market has changed. In the past, for example, traders held oil speculatively until the price was favourable, a practice known as the "contango" market, but products now tend to come in and go out much faster.
Oiltanking currently owns over 20 tanks with a total capacity of 560,000 cubic metres, including new tanks inaugurated last year at a cost of €23 million.
Oiltanking Malta's parent company Oiltanking GmbH, part of the Marquard and Bahls group, operates 75 terminals in 21 countries, storing oil, petroleum chemicals and gas. The Malta terminal is its only one in the Mediterranean.
"When Oiltanking first came to Malta in 1990, the island was not on the map for this type of business and it was hard to persuade clients to consider it. However, our business development unit in Amsterdam, where Oiltanking has one of its largest terminals, helped to push business our way," she said.
"There was a time when the tanks were empty but they are now all rented out, whether for the medium or the long term. The leases are for approximately five years but as a result of high demand, we are getting requests for longer as clients want to ensure that they will have the capacity if and when they need it."
Oil companies offer different operating models, ranging from those that store their own oil to those who rent out spare capacity. Oiltanking Malta rents out capacity and not the tanks themselves, but more importantly does not own the product. These give it a lot more flexibility - while the fact that they are rented for years at a time means that it has a strong element of guaranteed revenue.
"It is a question of outsourcing. Storage is not the core business of oil and gas companies or of traders," Ing. Evangelista said.
Oiltanking Malta will next month start carrying out a jetty occupancy study to identify whether it is making the most efficient use of its four jetties in Kalafrana and how much additional capacity could be built.
Vessels unloading fuel for the local market might complete their discharge in hours while tankers could take days, which is why a jetty occupancy study is an important place to start: It is no use having more storage tanks if you do not have the space to handle the vessels. Also to be factored in is the fact that the vessels are getting larger; last year Oiltanking handled a 121,000 DWT vessel, the maximum it can cope with.
"The fact that we have a deep water jetty is a very important part of our competitive advantage as it gives the client the option of switching oil from large tankers to smaller vessels or vice versa. And being at the crossroads of the Mediterranean means we are offering a service to vessels on the main routes.
"In this business there are three important factors: location; location; location! Malta has them all."
If demand is growing that much, it only stands to reason that other countries might decide to open terminals of their own but Ing. Evangelista is not concerned about competition. In the first place, Malta has other advantages like legislation and a good investment climate; in the second, there is so much demand that another player would not affect Oiltanking.
"However, it is very important that we satisfy our clients' demands. Of course, if we had more tanks we would also be able to say 'yes' to prospective clients that we currently have to turn away," she said.
The Malta Freeport Corporation recently sold its 30 per cent shareholding in Oiltanking Malta, while Oiltanking GmbH also sold 15 per cent of its shares in Malta (as well as shares in Amsterdam and Singapore). The Maltese shares were bought by 3i Infrastucture Investment Fund of the UK, although operations are still in the hands of Oiltanking. The company has a 25-year lease on the land, renewable for two 10-year periods, for which it pays a lease to the government. The government also earns a fee on all throughput. Oiltanking Malta currently has 49 staff, with a state-of-the-art control room from where most of the automated processes are handled.