Vtt vasiliko

COMPANY PROFILE

2015

VTT Vasiliko

+31 10 4987 351 | www.vtti.com

A port of opportunity Editorial: Harriet Pattison

Founded in 2010, VTT Vasiliko has since been establishing an oil storage facility worth an estimated US$375 million, located in the port of Cyprus. Standing as the country’s single biggest infrastructural foreign investment, on completion of Phase 2 in 2016, the total terminal capacity will be close to 900,000 cubic feet.

A subsidiary of VTTI B.V., VTT Vasiliko Ltd was founded in 2010, after the concept for a terminal 50km south of the capital, Nicosia, was initially conceived by one of the company’s shareholders, Vitol. The oil storage and management facility, worth an estimated US$375 million, stands as the single biggest infrastructural foreign investment within the energy sector in Cyprus to date.

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Phase one of the terminal project was completed late last year. Ensuring 543,000 cubic feet of capacity, it dealt predominately with white products – jet fuel, gasoline and gas oil. The initial stage included the development of 28 tanks, four jetties and 17.5m maximum draft. Phase two has recently been under evaluation and on completion - due in late 2016 - will create an additional 13 tanks

and 305,000 cubic feet of capacity.

A STRATEGIC LOCATION Cyprus, in terms of product flow and logistics, is in a prime maritime location, the perfect pit stop to connect Europe and the Black Sea with markets in Asia and the Middle East. Before the terminal was built, there were zero oil storage facilities in the area, with inadequate

VTT Vasiliko capacity to store and support the product flows between the east and west.

“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,” explains George Papanastasiou, Managing Director of VTTI/ VTT Vasiliko Ltd. “The deep sea marine facilities the VTTV terminal offers and the related flexibilities is exactly what oil traders were missing in this region. W ith 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.”

In short, Europe has ample gasoline, where the eastern Mediterranean is short and due to various developments in both regions, greater quantities of diesel

are consumed in mature Europe and gasoline within the developing eastern Mediterranean region – highlighting further the need for a Cypriot terminal to help facilitate this distribution.

Sitting in a deep-water location, Cyprus will become ideally placed for bigger bulk ships, allowing them to stop and break bulk for smaller vessels, before sailing off to their end destination.

“Europe has transitioned to using natural gas and fuel: oil consumption tends to be restricted to developing countries in the East. However, in order to transport it eastwards, one needs to make bulk as opposed to breaking it; and the only logical way and place to achieve this is through Cyprus,” Papanastasiou explained during an interview with Energy Boardroom in October last year. “The Bosporus straights, for example, though equally

strategically positioned would be much too shallow for vessels the size of Suez Max.” W ith Phase two scheduled for completion in 2016, the total capacity of the terminal will be close to 900,000 cubic feet. The slightly longer timeframe of the second phase is largely due to the construction of 13 fuel and crude oil tanks which are being built on reclaimed land - this needs to be constructed and given time to settle before the tanks can be placed.

Reclaimed land is a more cost effective alternative, especially for the location of this terminal, largely due to the rising price of land in Vasiliko.

In March 2012, a deal was signed with leading international building, civil and electromechanical engineering contractor, the J&P Group for an Engineering, Procurement and Construction contract for an Oil Tank Farm with a net capacity of 630,000 cubic meters (34 oil storage tanks

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and one oily water tank), Jetty, topsides and associated works.

In a statement, Efthyvoulos Lacovides, J&P General Manager, said: “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 months and the second in 26.5 months.”

Papanastasiou explains the relationship between J&P and VTT Vasiliko had proven to be a successful one with positive results.

“A three year relationship characterised by constructive

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“The VTT Vasiliko investment as the first onshore infrastructure energy project has showed the direction and set the pace”

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.

“The VTT Vasiliko investment as the first onshore infrastructure energy project has shown 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,” he says.

BOUNTIFUL OPPORTUNITIES R e a ff i r m i n g t h e c o m p a n y ’s unfailing commitment to Cyprus, George

VTT Vasiliko Papanastasiou explained the p o s i t i v e re s u l t s t h i s t e r m i n a l will bring to both the country and its economy longterm once it is completed and fully operational: “Our commitment and confidence i n C y p r u s re m a i n s a s s t ro n g a s e v e r. We e x p e c t t o i n v e s t a ro u n d € 3 0 0 m i l l i o n a n d o u r o i l s t o r a g e t e r m i n a l p ro j e c t i s p ro c e e d i n g a c c o rd i n g to plan. In addition, an expansion of the terminal is under consideration, which c o u l d i n c re a s e t h e o v e r a l l i n v e s t m e n t t o a ro u n d € 4 0 0 million.

“It will bring significant capital injections and economic benefits to Cyprus, f ro m j o b s t o t h e re d u c t i o n of fuel costs. The Cyprus Ports Authority will benefit a ro u n d € 1 8 m i l l i o n a n n u a l l y

f ro m p o r t d u t i e s , w h i l e t h e state will have additional re v e n u e s f ro m c u s t o m s a n d the taxation of companies m a r k e t i n g p ro d u c t s t h ro u g h t h e t e r m i n a l . We s e e C y p r u s a s a f u t u re e n e r g y h u b o f t h e Eastern Mediterranean, and an attractive place in which to invest.

“Cyprus continues to be a s o l i d b u s i n e s s c e n t re f o r its favourable geographical location, EU membership and the high quality of human capital, services and i n f r a s t r u c t u re . T h e t e r m i n a l a l s o p ro v i d e s o p p o r t u n i t i e s to develop other services c o m p a n i e s i n t h e a re a , bringing additional economic benefits to Cyprus,” he explains.

O f c o u r s e , w i t h a p ro j e c t of this size, especially one

BIOTEK who successfully completed the prefabrication and the erection of the 47 piping modules and the installation of equipment of the Jetty Terminal Project, as well as the prefabrication and the erection of the piping of the Tank Farm, would like to express its satisfaction for the successful operation of the terminal for the first 6 working months.

w h i c h i s s o re v o l u t i o n a r y f o r t h e re g i o n , i t i s i n t e g r a l t h a t c e r t a i n e n v i ro n m e n t a l s t a n d a rd s a re m e t a n d Papanastasiou explains the implementation of these g re e n s t a n d a rd s w e re essential to the development: “ T h e ‘ g re e n ’ v e n t u re i s i n o u r p h i l o s o p h y a s a g ro u p a n d o u r h i g h o p e r a t i n g s t a n d a rd s and experience give us the confidence that the VTT Va s i l i k o t e r m i n a l w i l l c re a t e no harm to people or the e n v i ro n m e n t t h ro u g h o u t t h e years of operation.”

The local people will also re a p t h e b e n e f i t s o f t h e terminal as Papanastasiou e x p l a i n s : “ L o c a l re s o u rc e i s t h e d i re c t i o n f ro m V T T I . C y p r u s o ff e r s h i g h l y e d u c a t e d h u m a n re s o u rc e s which only lacks the

BIOTEK Agios Athanasios, Thessaloniki, W.B. 325, Ionia, Greece, P.C:57008 Tel: +302310723670 Fax: +302310723680 Email: info@biotek.gr Website: www.biotek.gr

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experience due to the specialised knowledge t h a t i s re q u i re d i n t h i s c a s e 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.�

OVERCOMING CHALLENGES Standing as the single b i g g e s t i n f r a s t r u c t u r a l f o re i g n i n v e s t m e n t i n t h e c o u n t r y, i t s development will inevitably bring up challenges along the way and perhaps one of the

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most testing w a s s o u rc i n g t h e e x p e r t i s e a n d k n o w l e d g e re q u i re d to complete the terminal i n a l o c a t i o n t h a t , b e f o re n o w, w a s k n o w n a s m o re o f a t o u r i s t re g i o n t h a n a h e a v y i n d u s t r y re g i o n a n d t h e t w o a re n o t n e c e s s a r i l y compatible.

Built on such a large scale, Papanastasiou explains t h e o ff s h o re m a r i n e j e t t y p ro v e d p a r t i c u l a r l y d i ff i c u l t largely due to the Cypriot government lacking the experience and knowledge not only for the construction

p ro c e s s b u t to licence t h e Va s i l i k o terminal.

Speaking to Energy B o a rd ro o m , P a p a n a s t a s i o u e x p l a i n e d t h a t i n o rd e r t o o v e rc o m e t h e s e m o re localised challenges, the company undertook a series o f e d u c a t i o n a l e x e rc i s e s in similar establishments a b ro a d – “ We s h u t t l e d e n v i ro n m e n t a l c o m m i t t e e s a b ro a d t o d i s c o v e r h o w other countries maintain e n v i ro n m e n t a l l y f r i e n d l y terminals; we accompanied the Port Authority to Fujairah i n o rd e r t o s h o w t h e m t h e possibilities of operating a small fleet and having c o m m e rc i a l v e s s e l s c o m e in and out; and we even e x p o s e d t h e l o c a l f i re b r i g a d e

VTT Vasiliko to the latest practises in o i l f i re c o n t a i n m e n t a n d f i re f i g h t i n g . T h e s e a re a l l e x a m p l e s o f h o w w e w e re a b l e t o o v e rc o m e a m u l t i t u d e of local-level obstacles. It a l l t a k e s t i m e , b u t t h ro u g h education we believe that w e c a n re a l l y c h a n g e t h e mentality of the system.”

It is hoped that this terminal will set the pace f o r f u t u re d e v e l o p m e n t s i n t h e re g i o n , h e l p i n g t o m a i n t a i n g ro w t h a n d l o c a l SME development. One such example that Papanastasiou uses is the local laboratory w h i c h h a s b e e n c re a t e d to complete the task of c e r t i f y i n g p ro d u c t s t h a t w i l l p a s s t h ro u g h t h e t e r m i n a l f ro m t h e e a s t a n d t h e w e s t .

I n a b i d t o re d u c e re l i a n c e on the Cypriot port and to

“It will bring significant capital injections and economic benefits to Cyprus, from jobs to the reduction of fuel costs”

help with the services the t e r m i n a l w i l l p ro v i d e o n completion, VTT is in the p ro c e s s o f s e t t i n g u p a n e w a n d s t r a t e g i c c o m p a n y, d e s i g n e d t o p ro v i d e a f u l l package of services that w i l l b e re q u i re d a t t h e j e t t y f ro m p i l o t a g e t o t o w a g e t o m o o r i n g . U l t i m a t e l y, i t w i l l h e l p t o p ro v i d e g re a t e r flexibility for end users u s i n g t h e t e r m i n a l i n a m o re e ff i c i e n t a n d c o s t e ff e c t i v e way in comparison to the Cypriot port authority t h i s d o e s n ’t o p e r a t e a f t e r d a y l i g h t h o u r s a n d i n c re a s e s f e e s a f t e r o ff i c e h o u r s .

P a p a n a s t a s i o u a s s u re s that the new company will p ro v i d e ro u n d - t h e - c l o c k j e t t y s e r v i c e s a t p r i c e s m o re i n keeping with international s t a n d a rd s

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