THE WORLD OF OILTANKING VOL. 26/3 DECEMBER 2014

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Markets

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C O N T E N TS

IMPRINT connections Vol. 26/3/2014 Published by Oiltanking GmbH, Corporate Center, Admiralitaetstrasse 55, 20459 Hamburg, Germany, www.oiltanking.com, Telephone +49-40-37099-485, Fax +49-40-37099-499 E-Mail connections@oiltanking.com Coordinator Gabi Wuestenberg, Manager Communications Editor Renate Eijkholt Design raz design, Hamburg Print BEISNER DRUCK GMBH & Co. KG, Hamburg Published Three times a year Copy Deadline vol 27/1 week 5, 2015

ASIA PACIFIC

INDIA

EUROPE

Contents

LEISURE &ENTERTAINMENT

LATIN AMERICA

04 Oiltanking makes its mark on Singapore’s storage market

06 Elevated spirits at Oiltanking Malta

08 Oiltanking Bulgaria on its growth course

10 Demand for direct transshipment

12 Danish diversification strategy

21 Direct gasoline transshipment on the cards in Hanau

16 IOT strengthens its ties in the Middle East

22 More copper – LQS expands at Matarani

30 Successful renewal of operation contracts

14 We can, we care … in market research

18 Cultural Experiences | Variety is the spice of life

28 Bargain your way around the world

34 In a nutshell

17 Lexicon | Volatility

24 Shop till you drop …

32 Number | 2

35 Reader's Corner

36 Last but not least | Fancy floors with flavor

STORAGE MARKET

EXPANSION

SHOPPING

PEOPLE & PLACES

04

22

24

“A century ago, petroleum − what we call oil – was just an obscure commodity; today it is almost as vital to human existence as water.”* Indeed, some of today’s most traded and influential commodities are connected with the energy sector. And never has the energy market come up against so many uncertainties and risks as in recent years. While refineries in Europe face ongoing rationalization, the demand for oil keeps on rising on the emerging markets in non-OECD countries. Moreover, the shale oil and gas boom in the U.S. and the increase in output is having an impact on the energy markets and product flows. Consequently, the imbalance between supply and demand on the global oil and energy market is growing.Just as the market has changed, so has Oiltanking. Over the last 42 years, Oiltanking has developed from an independent oil storage provider specializing in terminals in Europe to an international storage logistics provider - also for chemicals and gases. This was achieved through constant analyzing of markets and business opportunities, and dedicated employees. The recent sale of our interest in Oiltanking Partners with its wholly owned subsidiaries, Oiltanking Houston and Oiltanking Beaumont, is also based on these principles. While we never had the intention to sell these assets, we did accept the Enterprise offer because we were fully convinced that this is an extraordinary opportunity for the whole group. We are maintaining a strong

presence in the United States through the terminals in Texas City, Port Neches and Joliet. Even after this strategic sale, Oiltanking remains the world’s second largest independent storage company. We will continue to grow our terminal network and follow our strategy as a leading independent storage partner, providing customers with flexible, safe and efficient services.We would like to thank all our Oiltanking colleagues in the U.S. for their commitment and great efforts over the years. And in particular, we wish those who will continue working with Enterprise all the best in their personal and professional futures that lie ahead. As of now — fresh from the market — you will find out more about Oiltanking’s current ventures and quest for markets worldwide in this just released “market” issue.

Happy readingfrom the Oiltanking Interim Management

Cover: “The Horn of Plenty” by Arno Coenen that adorns the ceiling of the recently opened “Markthal” (Market Hall) in Rotterdam, the Netherlands, whets visitors’ appetites. Read more on the back cover. © Markthal Rotterdam, Provast

Christian FlachChief Executive Officer

Julio TellecheaExecutive Board Member

metamorphosis Market

* The Honourable James Buchan (born on June 11, 1954) is a Scottish novelist and journalist.

Jurong Island is a 32 km2 artificial island formed by the amalgamation of seven offshore islands located southwest of Singapore. It is also the heart of the city-state’s petrochemical industry and home to more than 95 leading oil, gas, petrochemical, and specialty chemical companies from all over the world.

Back in 1989, Oiltanking started the construction of its first terminal in Singapore with an initial capacity of 260,000 cbm. Ever since, the terminal has continued to grow based on market needs. Until the beginning of 2006, the storage market in Singapore was fairly modest in size with a relatively small number of competitors. But between 2006 and 2009, storage development really took off and the same held true for Oiltanking thanks to the construction of additional capacity on its existing and at new sites on Jurong Island over the years and the acquisition of the Helios terminal back in 2012.

There are several reasons why Singapore became Asia’s undisputed oil hub. Firstly, it is strategically located between the Indian and Pacific Ocean, giving companies easy access to large regional markets. Secondly, deep-water berths at the various independent terminals can

accommodate large oil tankers, while the southern edge of Jurong Island boasts

very large crude carrier anchorage (VLCC) and facilities for liquefied natural gas (LNG). Most importantly,

Singapore has become a recognized Platts pricing hub, advancing trade and market liquidity. Today, Singapore’s third-party storage capacity exceeds 10.5 million cbm.

AS I A PA C I F I CAS I A PA C I F I C

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IN FOCuS Oiltanking’s terminals play a vital role

as a storage provider on the Greater Singapore market.

MARKET SHARE Oiltanking is well positioned in the Straits Hub in

and around Singapore.

Singapore’s storage market

Along with Rotterdam, the Netherlands, and Fujairah, United Arab Emirates, Singapore is currently one of the top three bunkering hubs in the world. Since Oiltanking commenced its activities in Asia with the construction of the first tank terminal in Singapore in 1989, the market and the company’s facilities there have developed tremendously.

Due to the shortage of land, Singapore stopped approving new storage projects that purely serve trade. It aims to develop Jurong Island further into an integrated petrochemical hub, thereby attracting businesses that generate a higher value per square meter. In order to still participate in Singapore’s trading activities, storage terminals have sprouted up and are still doing so in neighboring Johor in Malaysia and the Riau Islands in Indonesia. This area is now better known as the Straits Hub.

Singapore’s European counterpart is Rotterdam in the Netherlands — the largest port and integrated production center on the continent. Due to its strategic location on the Rhine-Meuse-Scheldt delta in the North Sea and its blending capacity and specialized storage infrastructure and capabilities, it holds a strong position in the oil and chemical storage market, offering more than 30 million cbm of tank storage facilities for all types of liquid bulk.

In general, the global energy market has become increasingly diverse and complex. With new world-scale refineries springing up in the Middle East, India and China, old refineries shutting down in Australia and Japan, and

the development of shale resources in the U.S., changes in global flows are flagged up high on the agenda. The growing demand for oil in Asia is likely to continue thereby supporting demand for storage capacity in the Straits Hub around Singapore. Oiltanking currently operates three terminals on Jurong Island and is building a world-class facility in Karimun, Indonesia, 25 nautical miles southwest of Jurong Island. The four facilities in the Straits Hub will complement each other with their own specific infrastructure and capabilities, which will enable Oiltanking to position itself soundly in today’s competitive market to win the additional anticipated trade flows and provide a comprehensive value proposition to meet the widest possible range of market needs and functionalities.

Four Oiltanking pillars in Singapore� Oiltanking Singapore (1.3 million cbm) enjoys a strong position as a gasoline-blending terminal. It is integrated in two refineries (Shell Bukom and SRC), the petrochemical complex (PCS) and Oiltanking Odfjell Singapore (for gasoline components). Additionally, it holds a key position on Singapore’s jet fuel, fuel oil and gasoil bunker markets. � Oiltanking Odfjell Terminal Singapore (388,000 cbm) is a world-scale chemical terminal serving multiple chemical plants on Jurong Island. It also supplies certified jet fuel to Changi Airport and is the only independent terminal in Singapore to provide these services.� Oiltanking Helios Singapore (503,000 cbm) is a world-class terminal optimally designed to store fuel oil and supply Singapore’s bunker market. The terminal can handle a full range of fuel oil grades and blends using air sparging, which has proven to be a highly effective technique. � Oiltanking Karimun (760,000 cbm) is Oiltanking’s latest addition to the Straits Hub scheduled for completion in the third quarter of 2015. The terminal boasts cutting-edge construction and design to provide its customers with maximum flexibility and vessel turnaround times. It will cater for fuel oil and clean petroleum products and have four deep-water berths at its disposal, including VLCC capability. Ships can be loaded with up to 6,000 cbm per hour.

Oiltanking makes its mark on

Market share 2015 (cbm)

18 %

3 %

66 %

7 %2 %

4 %

Oiltanking SingaporeOiltanking Helios SingaporeOiltanking Odfjell Singapore

Oiltanking KarimunSingaporeStraits

Elevation of the tanks tops up Oiltanking Malta’s commercial capacity. Heightened capacity means more flexibility for customers, as parcel size can be enlarged. In the near future, Oiltanking Malta will focus on operational flexibility and de-bottlenecking existing infrastructure, rather than on increasing terminal storage capacity. Things are on the rise in the Mediterranean: the terminal has consecutively achieved exceedingly good results in the last years; the elevated tank construction is nearly accomplished; the prospect of constant high demand for tank storage is bright, and Oiltanking Malta’s competitive spirit is alive and kicking!

E U R O P EE U R O P E

When housing space is scarce, the housing construction sector tends to skyrocket vertically by building multi-story buildings. Space on Malta is in short supply. The Mediterranean island’s 316 km2 is slightly less than twice the size of Washington, D.C., or almost the size of Rotterdam. Yet, since commissioning its first tank in 1992, Oiltanking Malta has expanded into a major oil storage provider. In order to be able to cater to rising demand for its storage facilities and counter the island’s restricted surface

area, Oiltanking Malta opted for the obvious: elevation of the tanks.

The scheduled replacement of two tank bottoms in 2014 was what presented the opportunity to bring creativity to fruition. Already during construction of the last new tank in 2012 the idea of elevated tanks had been introduced. However, before the jacking of the tanks could begin, preparatory work was involved. The Malta Environmental Planning Authority (MEPA) had to grant permission for construction. A

Working creatively with the island’s limited land availability, in 2014 Oiltanking Malta

increased its terminal’s capacity by elevating two tanks vertically instead of horizontally.

BEFORE Tank no. 131 had a height of 20.5 m and a capacity of 10,800 cbm.

AFTER The modified tank no. 131 with the increased 4.5 m has a total height of 25 m and a tank capacity of 13,300 cbm.

TO-DO LIST The original shell nozzle plates at tank no. 131 have been replaced.

WORK IN PROGRESS Two additional shell courses have

been added to tank no. 131.

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spirits at Oiltanking Malta geotechnical engineering company was commissioned to

inspect and verify existing tank foundations, which included considerations to change bottom profiles to improve operations. The original tank designer was responsible for preparing a preliminary tank design that featured two more shell courses, and for establishing new foundation loads. Oiltanking Malta’s operations’ teams were asked to ensure the cleanliness of the two tanks once their previously stored products had been safely re-directed to other Oiltanking tanks.

Once the tanks were clean and gas-free, lifting lugs were welded onto the tank shell and jacks were put into position. After cutting off the shell just above the bottom weld, the tank was carefully jacked up until there was enough space to insert a further shell course. Once the additional course was welded into position, the lugs were re-fitted to the lower position and jacking resumed to make space for another, the second, shell course that was then welded to the new bottom plates.

The elevation of the first tank was finalized in June 2014. The second tank elevation is due to be completed by end November (as of editorial deadline). “During the average four months’ construction time, the most time-consuming job was the re-profiling of the new bottom’s foundation from cone up to cone down. The most challenging undertaking of all was the coordinated lifting/jacking up of the tank shell to avoid tilting and deformation”, summarizes Soenke Stein, CEO Oiltanking Malta.

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Throughput development 2001-2013

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INNER STRENGTH The new tank foundation is made stronger with reinforcing steel.

OuTER ASPECT Tank and cup construction designed for an additional 6,000 cbm storage capacity.

Oiltanking Bulgaria on its growth course

2013 and was finalized in April 2014. It required careful planning and realization as it had to be performed without interrupting ongoing operations. To this end, new operational instructions were drawn up and external HSSE support was provided.

The signing, at the end of January 2014, of a 10-year storage contract with a local zinc and lead plant to meet the needs of its sulfuric acid production resulted in further growth at the terminal. The initial expectation to process 100,000 mt of extra throughput per year may just well hit the 200,000 mt mark. Hence, construction work on a new 6,000 cbm tank has been underway since June 2014. It is scheduled for completion by the end of the first quarter of

CONNECTIONSCONNECTIONS

2015, taking the total storage capacity of the terminal up to 24,000 cbm.

Oiltanking Bulgaria already plays a vital role in the country’s copper processing industry. With this expansion project, it continues to successfully assist the local production plants in their future endeavors to go on international markets. As there is still land available for expansion, Oiltanking is poised to offer competitive solutions to further develop the (petro)chemical activities in the port of Varna West.

With its current total capacity of 18,000 cbm, the Oiltanking terminal at the port of Varna West may be one of the smallest amongst the 72 Oiltanking terminals worldwide but it has chalked up a powerful performance over the years. When it began operations back in September 2001 to transfer sulfuric acid from a smelter production plant in Pirdop (400 km from Varna), it consisted of three 6,000 cbm tanks for product storage. It was originally designed to process 550,000 mt of sulfuric acid a year. Ever since, the throughput volume has gone up continuously.

Last year the throughput reached more than twice the

initial volume, which is almost 1.2 million tons. This means that the facility is now running at full capacity and is stretching its limits in terms of operational capabilities. Given the market developments, a further rise in throughput is expected. Oiltanking Bulgaria, therefore, decided to invest in more infrastructure to ensure safe and sustainable operations. To meet the new operational requirements, it constructed two new railcar discharge positions in addition to the four existing ones, thereby reducing the unloading time by 50 percent. As a result, third parties who are involved in the sulfuric acid business have more services than before. The construction work started in September

Since the Oiltanking terminal in Bulgaria started operations in 2001, the annual throughput has increased steadily. Oiltanking has invested in additional infrastructure to advance its throughput volumes.

E U R O P EE U R O P E

uPWARD TREND Oiltanking Bulgaria’s throughput development 2001-2013.

ENSuRING EFFICIENCy The new railcar discharge positions reduce the

unloading time by 50 percent.

8 9

Demand for direct transshipment

that no separate tank space is required for the transshipment process. However, a good handling is necessary to hold the ship and the railcar block train ready at the same time; otherwise, the tank terminal is blocked by transport, incurring high extra costs for demurrages and railcar waiting times.

The second option for carrying out direct transshipments is to include a tank in the process, which enables either one or even both railcar block trains to be unloaded into a tank before loading the cargo onto a barge. Alternatively, the first railcar block train can be unloaded into the tank and

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the product loaded onto a barge from there while the second block train is unloaded directly onto the barge. This offers the customer more flexibility when it comes to handling direct transshipments.

The demand for direct transshipment is on the increase. And thanks to its prime location and flexible infrastructure, Oiltanking Deutschland is well poised to meet this demand and is planning to expand further in the short-to-medium term.

According to the Association of the German Petroleum Industry forecast, a 13.4 percent decline in mineral oil consumption in Germany is expected by 2025 compared to 2010. If one considers the individual products, this decrease especially affects gasoline (-36.7 percent), heating oil (-35.2 percent) and fuel oil (-20.8 percent). On the other hand, there have not been any known refinery closures. In fact, new players have even entered the market through the acquisition of the Ingolstadt refinery by Gunvor or Vitol’s share in the Bayernoil refinery, for instance.

More of an import-driven mineral oil market in the past, Germany is thus particularly becoming an exporter of finished products in the gasoline and fuel oil sector. As some German and also Eastern European refineries do not have their own connections to the waterway network, relying solely on railcar connection instead, they have to find different alternatives to transport the product, which cannot be marketed in the area where the respective refinery is located, to the ARA region (Amsterdam – Rotterdam – Antwerp) and bring it to the global market that way.

The only possibility for these inland

refineries is to transport their

product to a tank terminal on the Rhine by

railcar and load it onto a barge bound for the ARA region. However, there are only a handful of tank terminals in Germany that are able to perform this kind of transshipment, including Oiltanking Karlsruhe, Oiltanking Bendorf and soon Oiltanking Hanau (see also page 21). While little importance was attached to terminals with railcar connection at locations that were also supplied by barges in the industry in the past, the fact that Oiltanking, unlike its competitors, maintained and sometimes even expanded its terminals with railcar connection is now set to pay off.

Railcar connection (back) in fashion

Direct transshipments can be conducted in two ways. The simplest option is to unload one or two railcar block trains directly onto a barge without the product actually touching a tank. Needless to say, this has the advantage

Changed constellations in the German mineral oil market have triggered an increase in demand for direct transshipment. What is the current situation and how is Oiltanking Deutschland responding?

E U R O P EE U R O P E

WELL PREPARED The direct transshipment of gasoline is already

possible at the Oiltanking tank terminal in Karlsruhe with a total

capacity of 261,000 cbm.

E U R O P EE U R O P E

June 1, 2013 was also a first for Oiltanking as its terminal in Copenhagen commenced a new business venture. OT Shipping Services assists Oiltanking Copenhagen’s existing customers with a wide variety of services, focusing chiefly on tankers that discharge and load oil cargoes in Copenhagen and the nearby ports. After only 18 months, it has gained valuable insights into the developments, opportunities and limitations on the local market.

In the meantime, OT Shipping Services has managed some port calls, but is still striving to gain a solid foothold in the market as a port agency. As Hans Chen Braas, Shipping Service Manager at OT Shipping Services, put it some

months ago the business is by no means a walk in the park and at the moment they see it as a pilot project. The number of tanker port calls in Copenhagen has declined from an average of 24 calls in 2013 to 17 per month to date. While there are many contributory factors, some of the main reasons for this development are the trend of ever-increasing ship size vessels calling at the ports and the quantity of imported and exported oil products in Copenhagen has generally remained stable.

Oil cargoes in Copenhagen primarily:} import jet fuel for Copenhagen Airport (about 40 percent)} import and export bunker gasoil for the Danish market (about 30 percent)} import gasoline and diesel for gas stations (about 20 percent)} import chemicals and provide long-term storage (about 10 percent).

Besides handling oil tankers in Copenhagen, OT Shipping Services offer transit services for vessels passing through Danish waters and consultation for a large Danish shipping company. Since May 2014, it has been generating adequate revenues to reach a breakeven point or sometimes even make a small profit. As of November 2014, Oiltanking’s sister company Bomin has been active in the Danish bunker market to supply bunkers in and around the waters of Copenhagen. Consequently, this move will create more traffic and port calls because the plan is also to supply bunkers ex-pipe from the berth. This

will be a new service in Copenhagen. Moreover, OT Shipping Services will act as Bomin’s local coordinator.

The biggest challenge ahead is to convince oil companies to change their “business as usual” mindset and use OT Shipping Services as their preferred agent. Compared to its competitors, the company really has an advantage because, as a subsidiary of Oiltanking Copenhagen, it has direct contact with the terminal during cargo operations, which helps to reduce the time of port calls. Despite its tough start on the market, OT Shipping Services remains confident that it has taken the right course and will stay right on track.

For more information or questions, please contact OT Shipping Services at copenhagen@otshipping.com or +45 3264 1251.

One and a half years ago, Oiltanking Copenhagen, Denmark, branched out into a new market by establishing OT Shipping Services A/S. It handles all kinds of port calls and shipping-related services for the surrounding ports. The time has come to see what course this new venture has taken.

COMPETENT PARTNER OT Shipping Services in Copenhagen handles all

kinds of port calls and shipping-related

services.

Danish diversification strategy

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SAILS ARE SET OT Shipping Services

entered the market in June 2013 and gained valuable experiences

ever since.

comes in knowing that my research has proved useful and helpful to colleagues and the company.” Sean Fu

Think of how a sponge works when calling to mind Oiltanking’s Arthur Schmidt and Sean Fu. Like sponges, the two saturate themselves with information before quenching the thirst of their team members. Arthur and Sean observe, screen, analyze and evaluate which data might best serve Oiltanking, then brief their colleagues with their findings.

Arthur joined the Oiltanking team in Hamburg in 2011. Speaking of his experience, he says, “To do the job, you need to have at least an affinity for research and an ability to cope with research routine. Good knowledge of English is an absolute must. An interest in energy markets and statistics is more than helpful.” “Moreover, you have to be persistent,” adds Sean, who began working at Oiltanking in Singapore two years ago. “And have lots of patience.”

To get their information and keep abreast of the latest trends, Arthur and Sean use all resources at hand. They monitor the Internet, for instance, and exchange information with external contacts, among which are

customers, brokers, ship owners, and consultants. Reading is obviously crucial for the job, so subscriptions to various industry digital and print publications are essential. Arthur and Sean, however, give new meaning to being well-read and informed. In addition to English, Arthur, who is an economics and mathematics major, speaks German and Russian. And Sean has a double major in economics and political science. The background and work experience of the two colleagues provide the perfect basis for grasping, understanding and advancing the development of the business.

Oiltanking’s research team members each have their own areas of focus. As a matter of course, however, the analysts constantly share intelligence, consult one another, and update each other on the latest information and the most groundbreaking industry knowledge. The research team members regularly produce independent reports on their specialized concentrations. As well as the regular, independent reports, inter-team members operating collaboratively produce larger, more in-depth reports. At Oiltanking, flexibility reigns supreme.

The market research team’s “customers” are their colleagues, who are primarily general and regional managers, business development managers, and merger and acquisition analysts. The nature of the oil storage business is that the direct results of research are usually only seen in the long-term, if they make themselves at all apparent. Arthur clarifies, “For instance, if management makes the decision to build a new terminal based on the market analysis we provide, it will take years before the facility is operational. So, if we are praised, it is mostly because our “customers” like our quick response-time, or the scope, or quality of our research reports.” Even if they may have to wait for praise on occasion, Arthur and Sean cannot wait to jump at the chance to take on a fresh assignment. The frequency of incoming inquiries for information needed to update and complete country profiles, and regional or other reports ranges from one per week to several a day. If the data is readily available, they can come back with an answer within minutes. But if intelligence must first be researched, an

answer can take anywhere from several days to a couple of months.

Luckily, Arthur and Sean both find the world of research as interesting as it is fascinating. It is a learning process, both agree. Arthur vividly recalls how he became educated on an exotic form of fossil energy (methane hydrate). Sean is still excited about the research work he did to find out the number of chemicals needed for the acquisition

of a chemical terminal, for instance. “The research was simply mind-blowing!” As much fun as researching is, imagining their ideal life comes close to a guilty pleasure. If not in market research, Sean pictures a life attuned to rhythm as a musician while Arthur would put his strategic skills to use as a risk manager or stock analyst. More outdoors oriented, Arthur's daydreams find him running up and down the sunny beaches of California, on patrol as a lifeguard.

P E O P L E & P L A C E S

The different departments at Oiltanking all have one thing in common: they are all instrumental in ensuring that both internal and external processes run smoothly to departmental standards. But who provides the answers to questions about what is happening in the market, for example? What information is relevant and what should actually be shared among Oiltanking colleagues? And, who is the go-to person for

information on business trends? The answer to all these questions is Arthur Schmidt and Sean Fu. The two, on behalf of their market research colleagues in Oiltanking’s regional offices, and Hamburg, Germany, give an idea of the scope of their responsibilities.

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P E O P L E & P L A C E S

picture: © China National Tourist Office

We can, we care …

“The greaTesT joy

} Is this relevant for oiltanking?} are existing operations affected?} Is this an opportunity for business development?

Core QUesTIoNs

aNd saTIsfaCTIoN

of your colleagues and provide them with the kind

of information they find relevant.” .

“yoU have To

UNdersTaNd The Needs

Arthur Schmidt

… in market research

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I N D I A

originally constructed and commissioned in 2006 and ORPIC’s recent investment is aimed at intensifying its production capacity. Once finished, it is anticipated that SRIP will increase the current output by almost 70 percent. Thanks to IOT Engineering and Construction Services LLC’s (IOTECS, a subsidiary of IOT) outstanding track record it will be heading the storage tank construction. Strict adherence to timelines and excellent follow-up data provided by IOT were just some of the key contributing factors in securing the contract. In the space of just three months (from tender application to award of tender) the team at IOT dealt with around 13 technical clarifications and seven bid revisions before finally winning the tender in June 2014.

The scopeIOTECS will act as a sub-contractor for the Petrofac-Daelim joint venture and will be responsible for the EPC of storage tanks. The project scope encompasses 49 tanks and one sphere. 37 of the total 49 tanks are fixed-roof while the remaining 12 are floating-roof tanks. Each of the largest tanks (three in all) measures 54 m diameter by 22.6 m height and has a capacity of 51,732 cbm. The project is scheduled to be completed within 21 months. The engineering work is up and running and in line with the real-time milestone completion dates created by the client. Despite the tight deadlines, the engineering activities werealready in full swing in July and the procurement team were ready and waiting to deliver by mid-August. So, it can be safely said that IOTECS has got off to a good start.

The Middle East, with its vast crude oil deposits, is an important region for a company like IOT that provides Engineering, Procurement and Construction (EPC) services for the oil and gas sector. IOT’s foray, as a trusted EPC contractor, into the Middle East began with the successful completion of a tank construction project for Oiltanking Odfjell in Sohar, Oman. Over the last few years, IOT has continued to strengthen its foothold in the region with a tank construction project in Fujairah, United Arab Emirates. Just recently, it won a project to erect storage tanks in the Sohar Refinery Improvement Project (SRIP), again in Sohar, Oman. This is the outcome of unflagging efforts and excellent teamwork between IOT’s head office, its regional office in the Middle East and its client Petrofac.

Contract winIt all started when Petrofac, an international oil and gas service provider, in a 50/50 joint venture with Daelim, a Korean engineering and construction company, was awarded a contract worth US $ 2.1 billion by Oman Oil Refineries and Petroleum Industries Co. (ORPIC). The contract includes improvements to the existing facility and the addition of new refining units. The refinery was

A new contract to build storage tanks for the Sohar Refinery Improvement Project in Oman gives IOT the edge as an EPC contractor in the competitive yet opportunity-rich Middle East market.

IOT strengthens its ties in the Middle East

L E x I C O N

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AMBITIOuS PROJECT Once ready 49 tanks and one sphere will be built by IOT's subsidiary LLC.

AT A GLANCE Crude Oil Price Volatility (1970–2035)

meantime, various factors still remain in play that over time can continue to drive heavy price swings. Moreover, it must be remembered that the supply and demand curve for oil is considered highly inelastic, at least in the short-term. Neither oil supply nor demand initially responds greatly to price changes. As a result, any shock to oil supply or demand, such as political or military upheaval or natural disasters, will lead to significant changes in the price of oil. Consequently, this establishes market equilibrium again. Yet, a consistently more volatile market may have been triggered by the emergence of two new factors, namely financial traders who show increased speculative behavior, and the arrival of investors from outside the oil industry.

Crude oil was among the first energy commodities to be widely traded. Today, as one of the world’s most traded commodities, the price of oil, like those of other commodities, can be volatile. The term “volatility” is used in the world of finance to refer to the variation in asset or commodity prices. When market prices tend to undergo a lot of change within a relatively short period of time, the market is said to have high volatility.

There are different ways to measure it. A volatility model aims to forecast volatility: this is the chief requirement in most financial applications. The models are

categorized either as historic or as implied volatility. While the former model reflects the past price movement of the underlying asset, the latter is a measure of market expectations with regard to the asset’s future volatility.

In previous decades, the oil market demonstrated periods of high volatility, with peaks in the 1970s and early 1980s reflecting oil price shocks. Turmoil in the markets led to a dramatic increase in volatility pre- and post the last global financial crisis, for example. Although the markets have calmed slightly in the

Volatility

© US Chamber of Commerce, Institute for 21st Century Energy

FROM BOLIVIA TO ARGENTINA TO COLOMBIA TO BRAzIL

“Starter”If my entire experience with Oiltanking could be equated to a multi-course meal, the appetizer was put before me in the city of Bahia Blanca, Argentina where I joined Oiltanking Argentina in 2006 as Project Engineer. Without a doubt, Bahia Blanca was the best place to start my Oiltanking career. The Puerto Rosales terminal there is the largest in Latin America, and every person I met on the team did their part to help me learn the ropes and become a team player. For instance, instead of just explaining how the job was supposed to be done, my colleagues were always ready to lend a helping hand to ensure that I also learned on the job. Foodwise, the delicious “dulce de leche”, a confection made by heating sweetened condensed milk, perfectly describes my welcome in Bahia Blanca: sweet!

During my four years at the terminal, I came to realize that there was something truly special about the place. Needless to say, in addition to working hard, my colleagues always had time to share their friendship and kindness, with a succulent "asado", which is a barbeque technique common to Argentina and an absolute event in the country, or a football game at the terminal every Friday evening; which was another good reason ending the week with a smile. At these events, people talk not only particularly loud but also with a frankness, which after a while, you learn to appreciate and get used to. In the end, I know that being part of the team at the Puerto Rosales terminal was one of the most special and rewarding experiences of my

Frankly speaking, I love food. So, when I left Bolivia eight years ago my thoughts were of course on the people I

would miss — and also on the expected cravings for the food I grew up with. I was already craving the food that had been an

integral part of all my memories. But joining Oiltanking has meant embarking on a journey of compelling projects, and ever more interesting plates of new and delicious cuisine.

life, delectable in every sense.

“First course”One of the entrées to my career

banquet was served in the delightful city of Cartagena. It is with very

good reason that Cartagena is called the jewel of the Colombian coast. The cultural diversity there is a vibrant amalgam of African, Caribbean and Spanish influence. Our team,

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Alfredo Lafuente was born in Cochabamba, Bolivia, where he attended the University of

San Simón. However, it was his professional career that took him abroad. Since starting at Oiltanking eight years ago he has already moved three times within Latin America. Here he regales readers with some of his experiences, occasionally, from a food perspective.

PORTuGuESE FOR BEGINNERS The Araial da Ajuda

Beach, Bahia, might well be “é minha praia” —which literally

translates as “it’s my beach”, but figuratively means, “that’s

my cup of tea”.

TRuE BLuE The Pedra Azul (blue stone), a

bare granite mountain in the state of Espíritu Santo, takes on a blue

hue in the shadow.

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too, was a perfect mix of Colombians and expatriates from four different countries. As an area, Cartagena is rich in biodiversity, and its history is loaded with adventure. I liken the entirety of the Cartagena effect to the mouthwatering smell of freshly baked “arepas”, a flatbread made of ground maize dough or cooked flour.

Cartagena’s center is the focal point of its tourism. Narrow streets from colonial times crisscross one another, and buildings are painted eye-catching colors. The wall that surrounds the city gives it its name, “Ciudad Amurallada”, the city surrounded by walls. Cartagena is bustling with life. There is always something to do. The city is packed with bars and restaurants, all serving food that is tasty and local. One of my favorite meals is fish with coconut, and “patacon”, mashed and fried plantains. With its perfect combination of smells and flavors, the dish is a visual and olfactory pleasure, and a feast for the palate.

“Second course”With unbridled gusto is how I would describe how I indulge in my career’s second course, the one I am enjoying in Brazil where I currently live. Brazil is incredible. There is just an abundance of attractions, including the people. They are friendly, and have an unquenchable joy of life and a sincere willingness to help. The country has a beautiful landscape, pristine beaches and impressive mountains. But the food, I am sure, has helped to shape my opinion. The delicious “agua de coco”, coconut water, “pão de queijo”,

cheese bun, and “acai”, a fruit served as a kind of sorbet, are unforgettable. Maybe you have

heard of the Bermuda Triangle? The one in Brazil is just as dangerous, but only to the waistline. Brazil’s

danger zone is in Praia do Canto in Vitória. The “capixaba torta”, a local baguette, and the famous “moqueca”, a seafood stew are the opposing ends of the triangle. The “icing on the cake”, however, will always be the birth of my two children, Emilia and Ignacio. As though Vitória was not special enough to my wife and me!

“Salad before dessert?”I am very much looking to the banquet of courses still to come in my career. I have had the opportunity now to live in three gorgeous countries in Latin America. The experience continues to enrich me personally, as well as professionally. That said, my link with Brazil is stronger with each passing day. I am sure that no matter where we may live in the future, Brazil will always be our second home.

THE METROPOLITAN CATHEDRAL With its stunning stained glass windows and impressive towers the building is one of the main tourist attractions in Vitória.

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PORTRAIT Alfredo Lafuente joined Oiltanking Argentina in December 2006 as Project Engineer. In February 2010 he moved to Vitória, Brazil, to take up the position of Project Manager for the expansion of the Vitória terminal. He assisted in the basic engineering of the Puerto Bahia project in

Cartagena, Colombia in 2011. In 2012, he returned to Brazil where he continues to work as Project Manager.

E U R O P E

The city of Hanau in the dynamic economic region of Rhine-Main in the central German state of Hesse is both a cultural center and a key transport, industry and technology hub. Oiltanking is also represented here and has been operating a regional transshipment terminal for handling significant quantities of gasoline, diesel, and heating oil for the Rhine-Main area for 15 years. So far, the tank terminal has been supplied by railcar and barge, while outgoing products are primarily transported by tank truck.

In the wake of the declining demand for mineral oil, especially in the gasoline business and given the subsequent wish on the part of the German domestic refineries to export the product to the global market via the ARA region (see also page 10), the demand for the direct gasoline transshipment

at the Hanau tank terminal has risen. Until now, only gasoil could be handled directly. Consequently, in the summer of this year Oiltanking Deutschland also decided to offer the service for gasoline in Hanau in the future. However, this requires the installation of a vapor balancing system* at the jetty, which should take place by the end of the fourth quarter (as of editorial deadline) — a step that places the Hanau tank terminal in a prime position to meet new market demands.

* A tank terminal’s gasoline system needs to be closed. A vapor balancing system prevents gases from being emitted into the environment.

Direct gasoline transshipment on the cards in Hanau

HANAu AND CuLTuRE There is a long tradition of art and culture in the Brothers Grimm City (as

Hanau is often dubbed in honor of brothers

Jacob (1785), Wilhelm (1786) and Ludwig Emil

Grimm (1790), who were born there).

HANAu AND INDuSTRy The Oiltanking tank terminal in Hanau is particularly well-suited for supplying the Rhine-Main region and large parts of Hesse, Thuringia and Bavaria.

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THE METROPOLITAN CATHEDRAL With its stunning stained glass windows and impressive towers the building is one of the main tourist attractions in Vitória.

Logística de Químicos del Sur S.A.C., commonly known as “LQS”, was incorporated in 2006 to satisfy the logistic requirements of the mining industry in southern Peru, mainly chemical products used in copper and molybdenum production processes. Since LQS commenced its operations for the reception, storage and dispatch of sodium hydrosulfide (NaHS) in 2007, the terminal has enjoyed a constant occupancy rate. Almost every month a chemical tanker berths in the Port of Matarani to unload NaHS at LQS. On a daily basis, chemical tank trucks are loaded with NaHS and their loads are transported to mining deposits owned by major mining companies, which are also LQS customers.

Peru, one of the top producer of gold, zinc, lead and tin in Latin America, is also the second largest producer of copper, silver and molybdenum in that part of the world. The mining industry has become a major economical driver for Peru during the last decade. This is evident in the rising number of mining deposit projects that are currently underway or which have already been completed.

In order to meet the rising demand for NaHS consumption, LQS plans to increase its dedicated NaHS storage capacity by 50 percent. LQS has been working toward diversifying the liquid chemical products stored at its terminal for several years now, and has met with success. The construction of storage capacity for sulfuric acid (H2SO4) as well as other infrastructure, such as for unloading of tank vessels and loading of railcars and tank trucks, will begin in 2016. At its completion, the total storage capacity of the LQS terminal will be 33,000 cbm.

Logística de Químicos del Sur, S.A.C., Peru, is expanding its capacity and product range to meet the ever-growing demand for the storage of chemical products.

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What is NaHS?Sodium hydrogensulfide (NaHS) is a chemical product obtained from the combination of hydrogen sulfide (in a gaseous state) and caustic soda (in a liquid state). It is traded in 42 to 45 percent concentrations in aqueous solution that makes for easier transportation and handling. NaHS’ main application is in the mining industry, specifically as a flotation agent for the separation of copper from molybdenum and as a sulfidizer on oxidized ores. Other applications are, for example, in the treatment of leather and wastewater, or in cosmetic products.

RIGHT FORMuLA The expansion of the terminal in the Port of Matarani will satisfy an ever-

increasing storage demand for chemical products in the area.

METAL FOR THE AGES The market for copper is one of the largest of all metals behind iron and aluminum.

LQS expands at Matarani

till you drop …

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Never fails to reel in people Are you a keen fish eater? Then a visit to the gigantic pulsating Tsukiji Market in Tokyo, Japan, is an absolute must. It is the largest wholesale fish and seafood market in the world, comprising hundreds of small stands in a sizeable, crowded hall, where buyers and sellers scurry along narrow lanes with their carts and trucks. Although it is a serious place of business, it is also open for visitors (8 a.m. to 1 p.m.). However, only a restricted number of visitors can view the famous tuna auctions and wholesale markets. Since it started trading in 1935, the market has expanded both in scale and function over the years. Today more than 400 types of seafood are sold from the early hours on. You can buy anything from endless varieties of inexpensive seaweed to costly caviar, tiny sardines to giant tuna fish and so on. In 2013, around 484,000 tons of marine products were handled. The biggest fish to date weighed in at a whopping 497 kg and was auctioned off for US $ 28,000 in 1995, and the highest price paid for a 222 kg tuna was a staggering US $ 1.76 million in 2013!

TSuKIJI MARKET The largest wholesale fish and seafood market in the world is planning to have moved to a new site in Tokyo, Toyosu (an

artificial island), by the spring of 2016.

MARCHé AuX PuCES DE SAINT-OuEN Claiming to be the largest of its kind

in the world, this famous flea market in Paris covers seven hectares and

receives between 120,000 to 180,000 visitors each weekend.

What markets have in common is supply and demand. However, the big difference is what kind of markets you are talking about and where they are located. Join us on a tour of various markets around the world. We hope you will find one you like!

Are you dreaming about striking gold? If yes, then you simply have to check out Dubai Gold Souk in the commercial business center in Deira, where over three hundred retailers trade almost exclusively in jewelry. It is estimated that there are approximately ten tons of gold at the souk at any given time. The gold trade boomed during the 1940s as a result of Dubai’s free trade policies, which encouraged entrepreneurs from India and Iran to set up shop there. The Emirates is one of the biggest physical re-distributors of gold, importing three hundred tons of gold on average per year. At the souk, you are spoilt for choice when it comes to high-class, low-cost gold jewelry.

If you are itching to do something, how about strolling around a flea market? While the concept of selling an array of goods (mainly second-hand) at a street market is not exactly revolutionary, the source of the term is still a bone of contention, though. One theory claims that it dates back to the 1880s and stems from “marché aux puces”, a name originally given to bazaars in Paris which specialized in shabby second-hand stuff of the type that may just well contain fleas. Another explanation finds itself yet again in Paris but this time round in connection with the city planners’ decision to construct new buildings and streets, forcing the merchants in question to “flee” and set up their businesses in front of the Porte de Clignancourt gate. This took place in and around 1860. However, others believe that it goes back to the colonial era when Dutch traders settled in New York. They called their outdoor market the Vlaie (the Dutch word for swamp), referring to the market’s location, which was once a salt marsh. What was initially pronounced “fly” eventually became “flea”.

Living it up in the world of glitz and glamour

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DuBAI GOLD SOuK The gold market’s traditional charm sparkles with an endless dazzling

display of jewelry.

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The beef bonanza

The good old corner store

Famed for its beef all over the world, Argentina has its Mercado de Liniers in Buenos Aires. Today, the cattle market, which first

opened its doors in 1901, constitutes the biggest cattle market worldwide, auctioning off approximately 9,000 livestock a day (from Monday to Friday). Gauchos on horses herd the cattle, which are first moved on transporters through a labyrinth of wooden fences to

reach the market. Here,

elevated walkways ease the process of examining the cattle in compounds. The ultimate target is to sell all the livestock on the day of arrival. And on Fridays, all the stock must be sold off as the market is closed on the weekend. Originally cows were brought into the country by Spanish conquistadors in 1536. Today, cattle is the second most important line of business in Argentina and it is said that the meat industry is a major yardstick for the weal and woe of the country.

Buying your daily supplies in a shop just around the corner, getting the latest gossip and having a cheerful chit-chat with the owner who, in case you are a bit short, does not mind you taking goods on credit! Those were the days of the good old mom-and-pop shops. But most of them are well and truly gone and a lot has changed since the introduction of the “supermarket” as we know it today. The first one called the King Kullen Grocery Company opened in New York in 1930.

In Osnabrück’s Villa Schlikker, Germany, you can travel back in time. Here, in the Kulturgeschichtliches Museum (cultural historical museum), eye-witness accounts of everyday life in the 20th century come alive. Among the displays, you can also find a genuine example of an “aunt Emma shop”, which is how Germans affectionately call these redundant grocery shops. The expression probably refers to the name commonly given to

maids back then and a child’s way of addressing older women, which underlines the direct contact customers used to have with shop owners. The exhibits belonged to Tackenberg’s grocery shop, which can pride itself in a tradition which dates back to 1704. It closed shop in 1980.

11 WALL STREET The New york Stock Exchange has its headquarters

here. The famous building with its portentous Romanesque façade was

built by one of New york’s leading architects, George B. Post, in 1903.

HOT IN THE CITy The choice of the world’s beloved spices on offer at the vibrant Crawford Market will definitely spice up your visit to Mumbai, India.

Mumbai, India’s financial capital, is a major draw and delight for connoisseurs of world-heritage Victorian and Gothic styles of architecture. One such building is Crawford Market, Mumbai’s most famous bustling spice bazaar, which was named after Arthur Crawford, the first municipal commissioner of the city. While most spice markets in India are outdoors, Crawford Market is one of the few to be located inside. It is home to Mirchi Galli (which, literally translated, means chili lane), aptly named for the freshly ground Indian spices sold there all year round. Whether it be dried ground ginger, turmeric or brown mustard, you are most likely to find top-notch quality in this hot spot. During the spice harvest (typically from March to May, when Indian homemakers prepare spicy pickles for the entire year), the market comes alive

with the aromatic fragrance of magical Indian spices such as red hot chili peppers, cumin and cardamom, all sold at wholesale prices. The place is also buzzing and pulsating with Indian distributors from all parts of the country who go there to clinch good deals.As well as everyday spices, the stunning selection of stalls also stock everything from exotic cinnamon quills, snow mountain garlic, garam masala (a mix of unique Indian spices) to an assortment of after dinner mints (called mukhwas), making a visit to Crawford Market a must for all foodies.

And now over to the stock market, the New York Stock Exchange (NYSE), also nicknamed “Big Board”, is the place to see and be seen. It is the oldest stock exchange in the United States and the world’s largest in terms of the market capitalization of its listed stocks. Its history goes back to the signing of the Buttonwood Agreement, which took place on May 17, 1792, by 24 high-profile brokers and merchants who decided to trade securities on a commission basis. Business soon took off and in 1817 the New York Stock & Exchange Board was established, laying down the rules regarding business conduct. Today, the NYSE trades in a continuous auction format, i.e. traders execute stock transactions on behalf of their investors. The NYSE opens from Monday to Friday (9.30 a.m. to 4 p.m.), closes early on very rare occasions and has nine days of vacation a year. For security reasons, however, the NYSE is no longer open for public visits.

A flavor of Mumbai

Where billions change hands

picture: © Felix-Nussbaum-Haus / Kulturgeschichtliches Museum Osnabrück, E 3032

P E O P L E & P L A C E S P E O P L E & P L A C E S

anticipate a bit of haggling and automatically pitch their prices higher than what they really expect to cash in.

So, what can you do to master the local habits and enjoy your next shopping spree if bartering is customary? Although there might be some slight

differences in bargaining practices between countries, most skills are universal and it might just come in handy to know a few. Here are some valuable and, of course, free tips to help you get a reasonable price when bargain hunting:

VALuE FOR MONEy Bargaining, bartering, haggling — whatever you wish to call it — is standard fare in a great deal of countries around the world.

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When you live in or visit a country where haggling is not standard fare and the only giveaway in town is when you get lucky in the sales or collect discount coupons, then shopping is a breeze: If something catches your eye and you want to snap it up, the price indicated is the amount you have to fork out and everyone knows where they stand.

However, things can get a bit tricky — especially for those who are not used to it — in countries where bargaining is almost a matter of earning respect and failure to do so might be viewed as a sign of arrogance of the financial elite or even an insult. An added drawback for non-hagglers is that they run the risk of paying through the nose as vendors

Haggling is a fairly uncommon practice for most people from Europe and North America, and some even find the thought of it so uncomfortable that they try to avoid it at all costs. In other countries, however, bargaining in markets and stores is all part and parcel of everyday life and sometimes it would even be considered rude not to debate the price.

Bargain your way around the world

In anticipation of browsing around the stores: Do some research to find out what the locals pay and what the regular price would be.

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Where to bargain: Find out where it is acceptable to haggle: In Southeast Asia or South America, you can do it almost anywhere while in other countries bargaining is limited to markets or privately owned stores.

6It is all in the timing: It might be easier to pick up the good buy later on in the day as sellers are more likely to be looking out for one last sale. Having said that, it could pay off to be the first one in the shop in Asia, for example: Superstitious sellers will offer you a good deal fearing that you will leave the shop empty-handed, which may be interpreted as a bad omen for the rest of the day’s sales.

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What to say: Knowing a few basics like “how much”, “please”, “thank you” and maybe a few numbers in the foreign language shows an interest in the other culture and might go down well with the seller. While some suggest asking for the best price instead of making the first offer, others are convinced that smart shoppers who make the first offer end up clinching the perfect deal.

3How to say it: While bargaining in Africa is somewhat loud and animated, you would be better off steering clear of confrontations in Southeast Asia and it would be advisable to use toned-down language. Do avoid words like “no” and expressing disapproval such as “… expensive, isn’t it … ”? Do not forget to keep on smiling and remain polite at all times.

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Before entering into a discussion: Decide on your own bottom line: What is the maximum price you are prepared to pay?

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Oiltanking, along with its affiliate Oiltanking Peru S.A.C., established itself in the Latin American market in Peru in 1998. Together with Graña y Montero Petrolera S.A. (through Consorcio Terminales), Oiltanking operates nine fuel storage terminals, all of which are owned by the state company, Petróleos del Perú – Petroperú S.A. Four terminals are located in the north of the country (Supe, Chimbote, Salaverry and Eten), and five in the south (Pisco, Mollendo, Ilo, Cusco and Juliaca). All nine terminals comprise a strategic link in the logistic chain and are crucial for the distribution of fuel within the country.

The operation contracts for the terminals in the north and south entered into force in 1997. The validity period was for 15 years, which also had an extension agreement that expired on July 31, 2014. The service scope of the contracts included key elements such as the reception of fuels (by land or sea), storage, and transfer to tank trucks. In addition, the contracts covered two types of infrastructure investments stipulated by Petroperú: mandatory and reimbursable. The investments needed to be made during the duration of the contracts, and in accordance with an investment schedule proposed by Petroperú.

March 2014 saw Petroperú call for a new bidding process for the operation of storage terminals in the north, center and south of the country. The scope of the 2014 contracts correspond to those agreed upon in 1997, but they are for 20 years and come with a higher level of committed and reimbursable investments. On the basis of their excellent long-term business relationship, Oiltanking Perú S.A.C. and Graña y Montero Petrolera S.A. decided to participate in the bidding as a consortium under the name, Terminales del Perú.

The consortium, Terminales del Perú, won the bid to operate the terminals in Peru’s north, as well as the terminal in Callao in June 2014. Consorcio Terminales will also carry on operating the terminals in the south of the country for one more year. The opportunity to go on with its services over the next 20 years demonstrates the commitment that Oiltanking and Graña y Montero have to Peru. Moreover, it mirrors the level of trust that Petroperú has in the two partners.

In June 2014, the consortium formed by Oiltanking Peru S.A.C. and Graña y Montero Petrolera S.A. was named the winner of a competitive bidding process launched by Petroperú S.A. The consortium will continue operating the terminals in the north and south of Peru, and has acquired the contract for the terminal in Callao, nearby the City of Lima.

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PERuVIAN MARKET PRESENCE Oiltanking is a significant market player in the world of bulk liquid logistics in Peru.

IMPORTANT DISTRIBuTION FuNCTION Oiltanking operates nine fuel storage terminals in Peru.

of operation contractsSuccessful renewal

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picture: © China National Tourist Office

Since its launch as an independent tank terminal service-provider in 1972, Oiltanking has come on in leaps and bounds.* With “independent” referring to the operation of storage terminals for third-party customers, the independent liquid storage industry has also undergone substantial changes over the last 30 years. What started as an integrated part of the production process has evolved into a mature, irreplaceable segment of the oil and chemical supply chain, with the storage of bulk liquids as its core business. While the independent storage business still includes many small and local companies that often own just a few terminals, some large, well-financed companies have emerged through

predominantly operate domestic terminals, only investing in foreign terminals in isolated cases.

Around the world, the demand for the physical transportation, storage and handling of oil and gas products and chemicals has seen a healthy uptick over the last few years. Rising trade flows of bulk liquid goods are at the forefront of this development, which again are attributable to a number of factors. These include rising global energy consumption, the opening and liberalization of markets, a growing imbalance – on both a regional and global level – between the areas of production and consumption of oil products and chemicals, and a wider variety of product specifications due to stricter environmental rules and regulations for the transportation and consumption of energy. Moreover, over 10 years of bullish sentiments in the oil market have injected new life to many oil-producing countries and regions – the prime example being North America – resulting in changing trade-flow patterns that require new infrastructure.

Looking to the future, there are strong indications that substantial additional infrastructure will be required around the world in the year ahead in order to link up the logistic networks of producers, traders and distributors. In this respect, the North American production bonanza has and will continue to have a major impact on global energy markets and

acquisitions, expansions and new constructions.

As of today, Vopak and Oiltanking are the only two truly independent tank storage companies with a worldwide presence. Both companies own a large global tank storage portfolio and both are represented with their own terminals at all four major oil hubs (ARA, US Gulf Coast, Arabian Gulf and Greater Singapore). While other players have a regional or national focus or are considerably smaller in size, most North American companies (e.g. KinderMorgan, NuStar, Buckeye, IMTT, Plains All American) are primarily engaged as pipeline operators and less as tank storage operators. Moreover, they

product flows in the long run. At the same time, substantial investments are currently being made in new refining capacities, particularly in Asia and the Middle East, in order to meet rising oil product requirements. Structural shifts in supply and demand in key production and distribution regions should result in further increases in interregional oil product transport volumes. Meanwhile, in line with the energy and GDP growth, the global demand for chemicals is set to continue on its long-term growth path. And finally, product blending and treatment will remain a key component of storage provider service portfolios as fuel standards will continue to differ substantially from country to country. To sum up, there are various developments and trends that – in many cases, irrespective of economic or cyclical factors – will continue to boost the demand for tank storage capacity and other logistical infrastructure in the future. Consequently, Oiltanking is looking forward to playing its role in meeting the world’s energy infrastructure requirements, thereby pursuing its long-term growth path.

NuMBER

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* Over the last 42 years, the initial capacity of Oiltanking’s tank terminals of approximately

1.7 million cbm has increased to 19.2 million cbm as of the end of 2014 with terminals spread over 72 locations in 23 countries.

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... and action!Try to solve our riddle and don't miss out on the chance to win! Please send your entries to: connections@oiltanking.com, or contact us by post: Oiltanking GmbH, connections Team, Admiralitaetstrasse 55, 20459 Hamburg, Germany, or by fax: +49 40 370 99-499.

C O N G R A T u L A T I O N S

N E W Q u I z

Quiz solution

I do’s and goo-goos

Thinking out of the box

It is you …! Hurray! We read a lot of correct answers stating that the four ships would meet again. These readers did not get tangled in any seaman’s yarn. Far from it. They knew all too well that it would take the ships exactly 48 weeks to meet. Now, we will make sure that the lucky winners Paul Ahrens, Oiltanking Deutschland, Catherine

Ho, Oiltanking Stolthaven Antwerp, Olaf Lippka, Total Deutschland, Jesús Medrano, Oiltanking Andina Services S.A.C., Wendy Van Poucke Oiltanking Ghent, and Zheng Yang, Oiltanking Nanjing Co., will not have to wait as long to get their Oiltanking jacket.

Talking about markets … weddings and babies also mean big business. From wedding planners to interior design consultants for the baby’s room, the market has been flooded with a wealth of service providers. Have you had a “market share” since April 2013? Then let us know! We look forward to receiving pictures of your wedding and/or the new addition to the family by week 5 at the latest.

This time round a merchant is in need of your logic and advice as he is struggling with a new incoming order. He has to send 96 boxes in one shipment, and can only place eight or ten small boxes in one carton. The only information he gets is that he has to stack more large boxes than small boxes, but he is not briefed on the number of cartons he can

use. Do you happen to know how many cartons he will need, and how many big and small boxes in total there will be? Hopefully you do.

You are more than welcome to share your knowledge with us before the delivery date (week 5) is due and win an Oiltanking Wellness Set. Good luck to all of you!

P E O P L E & P L A C E S

Europe The Bendorf tank terminal north of Koblenz, Germany, is one of the most important for the supply of the Middle Rhine region and is very well received by customers. The transshipment of gasoline, diesel and heating oil is constantly on the increase. As the truck loading stations were a “bit worse for wear”, the liquid-sealed coating underneath nine loading bays had to be modernized. In consultation with the supervisory authorities, Oiltanking opted for a large-scale flashing of the filling traces. The advantage of this

approach is that it enables a swift reconstruction as deep foundations can be dispensed with, which means that the loading does not have to be restricted unnecessarily – much to the delight of the customers and Oiltanking. The facility has been in operation for three months and lived up to its promise: it is watertight!

Europe After a construction phase of almost a year, the expansion of the Duisburg tank terminal to include a tank with a capacity of 2,500 cbm was successfully completed in February 2014. The tank is to be used for the storage and throughput of biodiesel. Through its launch and the easing of the pressure on the gas-oil business, Oiltanking Deutschland hopes to be able to increase the tank terminal’s turnover.

Europe On September 9, 2014 the 26 members of the Unternehmensverband Hafen Hamburg e.V. (UVHH) harbor board elected a new steering committee. Gunther Bonz, Eurogate Container Terminal Hamburg GmbH, was confirmed in his office as president for another three years and the five new vice-presidents also include Ulfert Cornelius from Oiltanking Deutschland. The main focus areas of the new steering committee’s work include harbor development and financing, the reinforcement of the modern universal port and small and medium-sized businesses, and the strengthening and expansion of the Kiel Canal. For over 60 years, UVHH has been championing the common economic and harbor-related interests of its members on the political, administrative and public stage. UVHH serves as an umbrella organization for over 100 Hamburg-based companies for transshipment and firms that perform upstream and downstream activities in this field.

NEW AND RE-ELECTED MEMBERS OF uVHH (from left) Gunther Bonz, Rainer Fabian, ulfert Cornelius, Holger Jungerberg, Heinz Brandt, Robert M. Eckelmann and Norman zurke.

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In October 2014, the ceremony to inaugurate the eagerly awaited “Markthal” (Market Hall) in Rotterdam took place. The Markthal is the first indoor food market in the Netherlands. Under a single roof which in itself is a visual delicacy are now 96 fresh produce units. A separate area for food refrigeration, storage and preparation is located below the market floor where restaurants and food shops are also to be found. The Markthal’s impressive 40 m high arch is the design of the Dutch architect, Winy Maas, of the Rotterdam architectural firm, MVRDV. The front and back of the arch are covered with a flexible suspended glass façade that is the largest of its kind in Europe, which allows for maximum transparency with minimum structure. Inside, the Markthal’s ceiling is yet another spectacular piece of art where massive depictions of fruit, flowers, and insects are presented. Entitled “The Horn of Plenty”, Dutch artist, Arno Coenen, created the work using 4,500 panels that measure a total of 11,000 m2. The sublimation print on aluminum sheets gives the impression of photographs. In fact, the ceiling’s images are the result of computer mastery. The opening hours for the Markthal are from 9 a.m. to 8 p.m. seven days a week. That leaves bags of time for visitors to experience the Markthal’s many flavors. And, with 228 apartments located in the arch itself the market lies literally at the feet of the residents.

L AS T B U T N OT L E AS T

Fancy floors with flavor

© Markthal Rotterdam, Ossip van Duivenbode