Singapore's Jurong Town Corporation could have put on hold the issue of an engineering, procurement and construction (EPC) tender for a very large floating structure (VLFS) to store oil and petrochemical products due to the weak storage market in the island-state.
JTC has been expected to issue the EPC tender since the beginning of this year. However, a decline in oil storage rates in Singapore could have dampened interest in the project from the petroleum industry.
"Definitely, definitely," Mohamed Merican, Lead Consultant - Oil Storage at TRI-ZEN International Pte Ltd. said when asked by Rigzone on the sidelines of the 29th Asia Pacific Petroleum Conference in Singapore whether the delay was a result of falling oil storage rates in Singapore.
Oil storage rates had fallen from $7-$8 to around $6 per cubic meter since the beginning of this year, an industry source said.
Earlier this year, there were reports that Singapore-based oil trading firms BP plc and Swiss trader Gunvor Group gave up their fuel oil storage space at the Universal Terminal (S) Pte Ltd at Jurong Island as the downturn in the global shipping industry made it more cost effective to store the oil on leased tankers.
Last month, China Aviation Oil reportedly paid the market rate of $6.50 per cubic meter to lease approximately 170,000 cubic meters of tank space for fuel oil and fuel oil blend components at Horizon Singapore Terminals, which belongs to a subsidiary of Emirates National Oil Company's unit Horizon Terminals.
JTC told Rigzone last month that it could not share the timeline for the EPC tender.
As at end 2012, Singapore has an oil storage capacity of around 55 million barrels, with the largest facility located on Jurong Island, the United States Energy Administration said in its March 2013 report.
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