Vtt

COMPANY PROFILE

2014

VTT Vasiliko Ltd

+357 24 257 500 | www.vtti.com/terminals/vttv-cyprus

Development in the East Med from VTTI Editorial: Roland Douglas

In November 2014 the new €300m VTTV terminal project opened in Vasiliko, Cyprus. Its strategic location will be the first of its kind in the Eastern Mediterranean, connecting Europe and the Black Sea with markets in the Middle East and Asia. This is an important development for European oil and gas transit and VTT Vasiliko General Manager, George Papanastasiou talks to Total World Energy about the development of the project…

The movement of oil and gas in the Mediterranean is critical for the energy industries of many nations. Asian and eastern countries depend on efficient transportation to supply product in and out of their borders; the North African market remains important to European supply; European nations rely on the Med for vital imports and the handy links to the Red Sea and the Black Sea as well as Russia and the Middle East make the Mediterranean an international hub for oil and gas

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transportation.

A tanker heading for the UK from Qatar will face a long and tricky journey of around 20,000 km if it has to head south around Africa and the Cape of Good Hope and up the Western African shipping lanes, not to mention the threat of piracy. But heading through the Arabian Sea and the Red Sea, into the Mediterranean will save time and money despite the obvious choke points at the Strait of Hormuz, Bab-el-Mandeb and the Suez Canal.

And now, to make things even more convenient, there is a new terminal in a strategic location on the island of Cyprus which will help to connect Europe and the Black Sea with markets in the Middle East and Asia.

The terminal is VTT Vasiliko and is located close to the Port of Vasilikos, 50km south of the country’s capital, Nicosia.

Owned and operated by international storage group VTTI, the VTT Vasiliko terminal has a 543,000 m³ storage capacity, 28

VTT Vasiliko Ltd tanks, four jetties and a 17.5m maximum draft – and this is all in the first phase of construction.

Phase two (currently under evaluation) will see the terminal create an additional 13 tanks and an extra capacity of 305,000 m³.

VTTI is a fast-growing independent provider of energy storage worldwide. Founded in 2006 by the Vitol Group, MISC Berhad became co-owners in 2010. The company currently offers eight million cubic meters of combined storage capacity across five continents. This will rise to over 10 million in the near future as new projects come on line.

“It is strategically located in a region where oil terminals are not common.

VTTI have high expectations from this Terminal because of its location and the flexibility it can provide to its users”

General Manager for VTT Vasiliko, George Papanastasiou tells Total World Energy that fantastic progress has been made with construction of the terminal and first oil is expected this month.

“The EUR 300M oil storage terminal of VTT Vasiliko Ltd is almost complete and it is expected to receive the first oil in November 2014.

“VTT Vasiliko is VTTI’s latest investment developed from a green field site, which incorporates the latest standards and technology.

It is strategically located in a region where oil terminals are not common. VTTI have high

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you can rely on our experience

Serving the Cyprus ports since 1951

Ship Agency Services at VTTV Vassilikos, the Energy Hub of Cyprus.

The first Oil Storage Terminal in the Eastern Mediterranean, connecting Europe and the Black Sea with markets in the Middle East and Asia.

FONASBA QUALITY STANDARD

-Ship Agents at VTTV Vassilikos -Port Agents at all Cyprus Ports -STS Operations -Offshore Support Services -Oil & Gas Logistics -Crew Changes We place our services at your disposal.

Please contact us: Shoham (Cyprus) Ltd 77 Franklin Roosevelt Ave. 3011, Limassol,Cyprus tel.:+357-25-208700 fax:+357-25-568990 email:mail@shoham.com.cy web:www.shoham.com.cy

expectations from this Terminal because of its location and the flexibility it can provide to its users.

“The information on the first owner and transporter is commercially sensitive but the products will be jet fuel, diesel and possibly naphtha.”

A CHALLENGING PROJECT A project of this size is not an everyday occurrence for Cyprus.

The value of the VTT Vasiliko terminal is equal to 1.7 per cent of the country’s GDP and Papanastasiou says that a project on this scale has not come without challenges.

“There have been challenges in all phases and parts of the project.

However, the offshore marine jetty has been the most difficult part as the Cypriot Authorities were lacking knowledge to license what was proposed and the knowledge for its construction was very

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“It is strategically located in a region where oil terminals are not common.

VTTI have high expectations from this Terminal because of its location and the flexibility it can provide to its users”

limited locally.

“Securing the required permits and licenses was a slow process at the beginning as this is the first project of its kind in Cyprus and the authorities were lacking the knowledge. This had an impact on a late opening of the terminal.

Going forward, we believe that the VTTV project will serve as a case study for future energy related developments in Cyprus.”

In March 2012, a deal was signed with leading international building, civil and electromechanical engineering contractor, the J&P Group for construction of the terminal. J&P General Manager, Efthyvoulos Lacovides said at the time: “J&P, with its experience in projects of similar complexity around the world, will begin the project immediately and will complete it within the deadline of the agreement, the first phase in 24

VTT Vasiliko Ltd months and the second in 26.5 months.”

Papanastasiou says that the relationship between J&P and VTT Vasiliko has seen positive results.

“A three year relationship characterised by constructive work, exchange of knowledge, share of experience and close cooperation was marked with the delivery of a ‘fit for purpose’ oil terminal in the East Med at the end of Oct 2014,” he says.

And topping off a project which has been widely regarded as a success, VTT Vasiliko has received all of the HSE (Health, Safety and Environmental) and EIA (Environmental Impact Assessment) certificates that are required to operate such a facility.

“The VTTV terminal meets the latest HSE standards of the oil storage industry. Furthermore the requirements of an EIA which was carried out, have been exceeded by the company,” explains Papanastasiou.

and potentially export following recent discoveries of natural gas and other hydrocarbon resources.

Because of the global interest in the region, VTT Vasiliko has designed its storage tanks to meet the needs of potential customers.

“The decision was made on the profile of the commercial activities of potential users of the Terminal,” says Papanastasiou. The tanks are a mix of mild steel, mild steel coated and mild steel insulated in design. These can be used to hold gasoline, jet fuel, kerosene, naphtha, gasoil, diesel, fuel oil and petrochemicals.

One of the key rationale behind the development of the terminal is the strategic location that Cyprus offers; perfect for moving fuel oil from the Black Sea to the East, ideal for moving Middle Distillates from the East to the West, and excellent for moving gasoline from Europe to the East Med and the Red Sea. “We expect our Terminal to enhance the supply chains of players moving products in all these directions but mostly those that break bulk in the East Med region. The deep sea marine facilities the VTTV terminal offers

BUSINESS IN THE EAST MED According to the US Energy Information Administration (eia), the eastern Mediterranean region, usually defined as Cyprus, Israel, Jordan, Lebanon, Syria, and the Palestinian Territories, is currently undergoing changes to its energy landscape. With expected economic growth, and the population of the region forecast to grow from 45.3 million in 2010 to between 58 and 62 million in 2030, energy demand should increase noticeably over the next two decades. This, along with growing export opportunities, means that the region will receive more and more tankers of bigger capacity and the likes of Eni, Kogas and Total have all showed intentions to explore further in Cypriot water

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and the related flexibilities is exactly what oil traders were missing in this region. With the development of mega refineries in the Middle East and the closure of refineries in Europe, it is something we expect that will change the balances and we will see more products moving from the Arab Gulf/Red Sea towards Europe in the future,” Papanastasiou says.

SLICK IN CYPRUS Apart from the large initial outlay from VTTI into Cyprus for this project, there are many more benefits set to be realised as a result of the new terminal.

The construction of the terminal is estimated to generate revenues of €18m per year from port fees, and the country is expected to receive further proceeds from taxes paid by companies to

“The VTT Vasiliko investment as the first onshore infrastructure energy project has showed the direction and set the pace. It will serve as an example for investors looking for opportunities around the globe, to see Cyprus as a location to put their money in energy related projects”

transport their products through the terminal.

Local people will also benefit as Papanastasiou explains: “Local resource is the direction from VTTI. Cyprus offers highly educated human resources which only lacks the experience due to the specialised knowledge that is required in this case and the small size of the market. Only when a certain skill or competency is not possible to develop locally, VTT Vasiliko will consider importing resources and this will be on a temporary basis.”

And with a company like VTTI investing in Cyprus, the General Manager suggests that the country could see more investment from energy companies in the future.

“The VTT Vasiliko investment as the first onshore infrastructure energy project has showed the

Joannou & Paraskevaides Group (J&P) is an international contracting company, who undertakes a wide spectrum of construction work in four continents for more than 70 years. J&P has been successfully involved in the Oil & Gas Industry over the last 40 years. J&P has extensive experience in the construction on EPC basis of oil gathering and processing stations, export terminals and tank farms, Gas-Oil Separation Plants, cross country pipelines, Gas Plants, Oil Refineries and Petrochemical Plants and other associated works in most countries in the Middle East, North Africa and Europe. J&P is proud to include amongst its Clients, most major international Oil & Gas Companies and Operators. Most recent project is the Vasiliko Terminal in Cyprus, a 600,000 m3 capacity multi-products tank farm comprising of 36 no. tanks and related Terminal Utilities, and ship loading facilities capable to receive simultaneously four tanker vessels of max. 160,000 dwt capacity through a 1500 m long marine jetty and mooring/loading platforms.

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Labuan Shipyard

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direction and set the pace. It will serve as an example for investors looking for opportunities around the globe, to see Cyprus as a location to put their money in energy related projects,” he says.

And of course, it’s not just international traders, oil companies and employees that will benefit from the development of the terminal. The local economy will receive a needed boost with a focus on the communities surrounding the project, by sponsoring and supporting educational and athletic centres, small local businesses and families in need.

The Cypriot energy market will also receive a boost as the current storage facilities at Larnaca are aged and do not provide efficient logistics for local marketers and are still slated to be relocated for Larnaca town development.

Currently, some of the excess Cypriot stocks are held in Greece

and Malta at a cost of €17 million per year.

“We estimate that the terminal will be fully complete and 100% operational to maximum capacity in a year from being operational” Of course, with a project of this size, in an area that is environmentally sensitive and surrounded by communities and water, there has been a requirement for certain environmental standards to be met and Papanastasiou is proud of what has been achieved so far.

“The ‘green’ venture is in our philosophy as a group and our high operating standards and experience give us the confidence that the VTT Vasiliko terminal will create no harm to people or the environment throughout the years of operation,” he says.

And there is more to come from this fantastic project. Phase 2, set to create further capacity and job opportunities is currently being reviewed by the relevant parties and when this is completed, the terminal will reach full completion and Papanastasiou expects this to be in around one year from now.

“We estimate that the terminal will be fully complete and 100% operational to maximum capacity in a year from being operational and this is based on the interest we see from oil companies and trading organisations. A change of the current market environment will expedite things, of course,” he concludes

BIOTEK is a Greek company operating in the oil and gas industry since 1987. It is experienced in a vast variety of projects, such as refineries, power plants, fuel tanks, gas pipelines, chemical industries and electromechanical activities for industrial facilities.

In 2014 BIOTEK was subcontracted a Jetty project in Vasiliko, Cyprus. The Jetty consisted of a steel access ramp for access to the vehicles, one main Trestle 1,5 km long pre-fabricated and pre-assembled in Modules for in-site installation on piles, one main Platform and 4 Berths for fuel loading – unloading. Each Module of the steel structure, approximately 160 tons weight, has all the process and utility piping assembled together.

The fabrication of the steel modules performed in Greece and transported in 3 separated pieces to Limassol port, where the assembly of each of the 47 modules took place with all the piping, secondary structures and scaffolds on it. For site installation, the modules were transported with a barge and erected with a floating crane to Vasiliko.

The second step, after modules erection, was piping and steel interconnecting, platforms and equipment installation.

In addition to Jetty, BIOTEK was also awarded with the piping interconnecting inside the Oil Terminal.

Both projects performed in parallel with absolute success, despite the short time period for completion and severe weather conditions, especially on the sea activities.

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VTT Vasiliko Ltd

BIOTEK is an experienced construction company in the energy ďŹ eld and mainly in oilgas industry.

After applying an effective style of integrated management based on mutual trust with clients, BIOTEK achieved to augment its status by successfully delivering projects.

In due respect to the latest technical innovations and practices conducted through a highly skilled personnel, BIOTEK always ensures the highest quality performance standards.

Fields of activity consist of energy, oil, gas and petrochemical construction projects competitively delivering civil and steel structures, piping prefabrication and erection, mechanical, electrical, instrumentation, sandblasting, insulation and painting works.

BIOTEK Agios Athanasios, Thessaloniki, W.B. 325, Ionia, Greece, P.C: 57008

Tel: +302310723670 Fax: +302310723680 Email: info@biotek.gr Website: www.biotek.gr PAGE 9

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