What have been the most recent developments for Vopak?
Located in 23 countries, with 70 terminals worldwide, we are currently transforming our portfolio, driving towards lighter fuels, chemicals and new energies. This means increasing our footprint in industrial chemical complexes and gases like LPG and LNG, as well as reviewing our oil portfolio. We are preparing the terminal network for the future, adapting to what we see as a changing environment.
Vopak is investment in hydrogen logistics technology. Hydrogenious LOHC is an example where Vopak is supporting infrastructure solutions to help the industry in the port of Rotterdam decarbonize through large-scale use of blue hydrogen. In Singapore, we are exploring the potential of low-carbon ammonia for shipping and of flow batteries.
Vopak signed a memorandum of understanding with Itochu to study the feasibility of ammonia as a marine fuel in the Singaporean supply chain. Could you share more details into this?
Itochu will be promoting the development of marine engines capabilities and the ammonia fuel supply chain, while Vopak will explore feasibility of an onshore storage facility, with a loading and unloading platform at our Banyan terminal. Ammonia is a zero-emission alternative fuel that could help the marine industry align with IMO regulations requiring the reduction of CO2 emissions by at least 40% by 2030 (against 2008 levels).
Could you share the digital initiatives carried out by Vopak? How is Singapore pivotal in these steps?
Vopak is implementing real time new ERP systems in which Vopak Terminals Singapore plays a leading role by going live with all assets during Covid. Many of our other innovations have now reached a scalable level of maturity and can be deployed at other terminals within our global network. For instance, in 2020, Vopak Ventures invested in a Singaporean drone technology start-up called Performance Rotors. Another example is our testing out drones and ROVs for tank and jetty inspections. Vopak is also using IoT devices to monitor assets and predict pump failures through wireless sensors. These technologies lead to high data volumes, so the second pillar of our digital strategy is to create data platforms to find applications for the information collected. Singapore is one of Vopak’s flagship locations for data platforms. To accelerate these emerging technologies for mass adoption, we are keen to work with like-minded partners.
Vopak reported higher occupancy rates in 2020 compared to 2019. What trends have you noticed in the oil and gas and chemical industries since last year?
Many oil storage terminals in key hubs and secondary locations have increased occupancy levels supported by the favorable oil market structure during 2020. At the same time, the chemical storage market witnessed lower throughputs in most regions as the pandemic spread across the globe suppressing demand for durable goods. Gas continues to fulfill its role as a sustainable transition fuel and feedstock, with gas storage providers benefitting from this momentum as seaborne gas trade (LNG & LPG) is growing across the globe. I am proud all of our 70 terminals globally continued operations, but this was a tough job. We observe a lot of demand delays for chemicals, as well as the phasing of shipments. The sudden reduction of capacity and then restarting of companies also poses challenges. There have been factory closures, cost tensions, negotiations, and, as a service provider, we are connected to each of these issues.
Could you remind our audience of the infrastructure that Vopak developed in Singapore and the significance of the country for the region?
In Singapore, Vopak operates five terminals and the Jurong Rock Caverns, as part of a JV with the Port of Singapore Authority Corporation (PSA) who retains a 30% stake. Singapore is what I call “a roundabout” or a hub-location for the region. From here, we can reach substantial growth markets. Singapore has managed to establish three refineries and over 100 petrochemical players in a couple of km2, which is a fantastic achievement. I remain confident that Singapore’s assets will adjust to the new normal and future opportunities, particularly if the business climate remains top-notch, and the country offers a safe haven for investments.
Vopak announced up to €350 million growth investments in 2021. What are your main objectives?
The majority of growth investments will be allocated towards industrial gas and new energies infrastructures. Our positive views on chemicals have not changed. New growth investments in oil infrastructure are expected to be reduced and will mostly be targeted towards strengthening our leading hub positions.
The world is reinventing itself and Vopak Terminals Singapore will continue to bring in new people, with new energy and new expertise, as well as introduce more digital and data-driven tech.