Category: Blogs

Market transparency in the Tank Terminal industry

The increasing of information stream due to digitalization and accessibility to information sources, has led to numerous debates in the oil markets. Refiners, traders, brokers, end-consumers and all other stakeholders within the industry need to cope with decision making on various levels and are therefore relying on certain proved sources in an industry which is full of closed doors and limited availability of information. Transparency in this market is therefore crucial to search and select the appropriate partners within the market and to make smarter business decisions.

Market transparency can be found in all different subjects within the oil and gas industry. Price setting agencies, transport and tank storage rates overviews and other statistical insights contribute to a level playing field, which can help the customer make the best decision possible. By obtaining instantly accurate information, one can reduce mainly costs, time and effort. Objective players in the oil and gas environment, help balance the markets by supplying vast amounts of data and information to all participants. Traders interpret the macro-economic data of NGOs, governmental institutions and central banks to weight their decisions and therefore depend on reliable information. Falsified or incorrect information can give individuals an edge and increases the costs involved for the other businesses.

Moreover, these objective market participants withhold fraudulent companies or individuals from entering and disbalancing the market. Associations such as, FERM Rotterdam (ferm-rotterdam.nl) provide insights over the fake suppliers of tank storage capacity, in order to limit the risks involved for other market participants. Individuals without proper knowledge of the markets, can easily become targets of these scams. Who is able to spot the differences when certain, legitimately looking, websites come across?

Websites about the same terminal in the port of Rotterdam, which one is legitimate?

For businesses entering the market, these organizations are key to a fruitful collaboration between suppliers and clients. In addition, these organizations show which websites, companies or individuals to bypass. Companies and terminals in the TankTerminals.com database are investigated by various database administrators before being added in the vast database of terminal details, characteristics, contacts and other relevant information. Data supplied by the terminals and the managers of the terminals is thoroughly checked before it is approved. The data is regularly updated and if possible expanded with more data to give a transparent overview on the tank terminals. This way, potential suppliers, customers and others interested have a quick go-to list which reduces the efforts of going through all kind of information. The completer the information in the terminal factsheets, the higher the reliability, legitimacy and opportunities to connect with the relevant contacts.

Market transparency is imperative in getting quickly the right information and with as little errors as possible. The oil and gas industry and its environment has been closed and constrained. However, it is rapidly changing in the digital age with the help of different organizations. The information, statistics and other relevant news can be supplied to the interested individuals and companies in order to get more insights, to make quicker and smarter decisions.

Author: Lars van Wageningen

Two-days Oil Academy

Increase Your Value with More Knowledge

Numbers from EY (2015) show that in the Netherlands around 16.000 people were active in the oil and gas industry. In the same year in the United States some 1.5 million people were employed in this sector. The service providing companies are not even taken into account. It is a massive industry!

It is not only big in size but also in complexity. A lot of companies that we meet only partly understand the logistical oil and gas chain in which they are active. They lack the knowledge to oversee the entire supply chain. Specifically these other parts of the value chain have a direct impact on their business.

Several companies have followed our two-days Oil Academy. After these days they are capable in understanding the functions of the oil and gas value chain. They understand better how the different market players work and how market fundamentals interact. More than 200 participants preceded you and rated this course with an 8!

For more information, request our Oil Academy brochure by registering in below’s form.

Agidens on leading in technology

Welcome to “GRIPPING THOUGHTS”, the space created by Insights Global where Clients, Partners and Friends are invited to share ideas and insights that help shedding light on the challenges that the Oil & Gas industry faces in the near and long future.

So join us, read and get inspired by our talk to Mr. Koen Algoet – Product Manager Terminal Solutions – and Mr. Kevin Pluvier – Project Manager Oil & Gas – at Agidens, a solutions provider with a workforce of over 600 people that for more than 70 years has been helping companies in various sectors to improve their operations in the areas of security, reliability, efficiency and sustainability.

Q: How would you describe the main market challenges at the present time?

In our view, the tank terminal market presents two main challenges.

The first is linked to Operational Excellence. Due to backwardation and the new capacity added in recent years, it is correct to expect a surplus of storage capacity that will increase the competition even more and leave profits under stress.

In this environment, there will be a high demand for improved, more efficient processes to guarantee full usage of the existing assets. A good example of how this can be realized is Agidens’ Axcel® smart slot booking solution. Due to increasingly bad traffic conditions, it is very common that trucks don’t make their schedules leaving terminals with empty slots and the necessity to reserve ‘late arrivals’ slots which reduce the normal asset capacity. Axcel® doesn’t use and thus ‘waste’ these empty slots but relies on the smart engine to recalculate updated planning scenarios keeping all available assets and resources into account.

The second challenge is linked to Human Resources. Nowadays there is a high workforce turnover in the industry, as a result of several reasons, among them the fact that young people don’t want to stay in the same job and activity for a long time anymore. The time and energy that is needed to train new employees into working with these manual procedures could be invested in automation. Furthermore, in order to attract and retain young people we can assume that automated terminals will have preference to manually operated terminals as an employer.

Q: And how do you see the industry evolving in a period of 5 to 10 years? What are the main challenges ahead of us?

As it was said before, due to the high competitiveness of the market there will be a growing pressure on the terminals in terms of operational excellence, but also to cope with the speed of innovation.

Even though there is a lot of interest in Artificial Intelligence, the focus in the next years will be on Big Data and in learning how to transform what is generated and collected by sensors – as a consequence of the development of the IoT – into knowledge.

Agidens understands the necessity to foster the development of specialists that can handle this new scenario that encompasses themes as cyber security, GDPR, new standards and regulations, and questions on how to communicate data between all the different networks, how to set up this data and how to do it in a secure, safe and controlled way.

Agidens embraces the proposition of sitting with the client to understand his problems and ‘pains’ in a consultative approach. So that the people involved in the project can take over and develop the product based solutions keeping a vision of the future time and not only the present.

At last, it is important to mention that no matter how much of a terminal’s management moves to the cloud, all that is related to safety must remain local.

Q: How is Agidens getting prepared for these future challenges?

Agidens understands that innovation is essential to offer competitive solutions to its clients, therefore we give special attention to this theme and how to accelerate its pace. We believe that if we expect to be ready for the challenges of the next ten years we must act today. First, by keeping a close relationship between our R&D department and universities as Leuven, Antwerp and Ghent. Second, by creating a culture and atmosphere that encourages our employees from different areas to voice their ideas and by granting time, budget and guidance from R&D for them to be developed.

As an example, at Agidens as soon as young engineers are hired they have the opportunity to be in direct contact with clients, especially with people who work on the field and experience the day to day challenges.

Agidens’ Atalk® solution is an excellent example of a product that was proposed by one of these young talents. While on the field, he noticed that there was a dangerous gap between the moment that a potentially dangerous event started – a fire, for instance – and the moment this information was passed to the personnel at the terminal. So he proposed a system that translates the usual text messages installed upon an existing operational control system such as SCADA or DCS into speech, in a way that now they can be transmitted by voice directly to the walkie talkies of all the employees around the terminal.

At last, it is important to give people time, support and a lot of training to be able to cope with the transformation speed of the industry.

PS: if you want to contribute to “Gripping Thoughts” please send an email to acavalcanti@insights-global.com

Find here other “Gripping Thoughts” articles:

Read now the interview with Bertrand Chupin, VP of the Loading Systems business unit of TechnipFMC, a global leader in subsea, onshore/offshore and surface projects, with about 37,000 employees.

Tank Terminal Market Model – Part 1

Last week was a short review of the profit drivers for physical traders, where we explained in short how traders make profit. There are a lot of different factors influencing the tank storage sector. Mostly the imbalances in the sector create opportunities for financial players. The market appears to be complex and demonstrating a lack of transparency. PJK International has developed a Tank Terminals Commercial Performance Model to quickly gain insight and a higher proficiency of the tank storage market. This is the first part related to the Tank Terminal Market Model, next week we will publish the second part for you to be able to connect the dots.  

MARKET FUNDAMENTALS

First we describe the market fundamentals as shown in the image below. Relevant market fundamentals for the oil storage business are the shape of the forward curve, the competitive market structure and the logistical factors supply, demand, imbalances and trade flows. The shape of the forward curve is determined on oil futures markets. The oil price forward curve can be upward sloping (contango) or downward sloping (backwardation). In a backwardated market is less demand for tank storage than in case of a contango. Inventory levels are also lower in a backwardation compared to a contango. Both demand and tank availability are therefore affected and this influences the commercial setting.

Furthermore the competitive market structure consists of a supply-side and demand-side market structure. Tank capacity and market shares of various terminal operators are key factors that determine the supply-side competition. The number of players, their size and diversity are key factors on the demand-side of the market. Both demand- and supply-side competition influence commercial performance of the terminals. And also Tank terminals are part of the oil products supply chain and therefore logistical factors such as local product demand, regional refinery output, imbalances and trade flows are very relevant. Developments in these factors influence the demand and requirements for tank terminal capacity.

MARKET DYNAMICS

Besides the market fundamentals we have to take into consideration the market dynamics. Relevant market dynamics are inventory levels, arbitrage and trade flows, changes in product specifications and variation in vessel sizes. These market dynamics have a direct influence on operations and on terminal requirements. A terminal that can accommodate and can adapt better and faster to these dynamics compared to competitors will likely show superior commercial performance. From the previous section you could already see that market dynamics are linked to market fundamentals.

CONCLUSION

The market fundamentals and the market dynamics are important building blocks for Insights-Global’s commercial performance model. If you have any questions regarding the above mentioned subject please do not hesitate to us. 

Investment dynamics vary per major trading hub

In the world, there are considered to be four major oil trading hubs: ARA, Singapore, Fujairah. These four port areas have their own different identity and their own local trading dynamics. In this high level research, we will compare investment intensity in these locations. For comparison purposes in ARA, we have split ARA in only Rotterdam and Antwerp.

In these 5 ports combined there are 146 terminal companies active. Most of the companies are situated in Houston (53), followed by Rotterdam (31), Antwerp (24), Singapore (21) and Fujairah (17). Looking at the capacity, these ports sum up to 76.35Mcbm. Most capacity is available in Houston (25Mcbm), followed by Rotterdam (19Mcbm), Singapore (15.28Mcbm), Fujairah (9.35Mcbm) and Antwerp (7.65Mcbm).

When we divided total storage capacity with the number of terminals we can calculate the average capacity per terminal. Biggest average tank size is in Singapore (0.73Mcbm), followed by Rotterdam (0.62Mcbm), Fujairah (0.55Mcbm), Houston (0.47Mcbm) and Antwerp (0.32Mcbm).

This calculation says something about the local storage footprint and the port’s specialty. For instance, Singapore is an Asian bunker hub which facilitates fuel oil storage. There are a number of big underground caverns there. Antwerp is focused on specialty chemical storage which need smaller tank sizes and lower average storage capacity per terminal.

For these five port areas, it is believed that around 22 expansions projects (existing greenfield, brownfield and planned additions) will add almost 8kcbm to current capacity. Fujairah has 7 projects, followed by Houston (6), Antwerp (5), Singapore (3) and Rotterdam. Looking at the growth per capacity, port that shows the largest storage additions is Fujairah (29%), Antwerp (11%), Houston (9%), Rotterdam (7%) and Singapore (5%).

The conclusion of these statistics is that the major oil trading hubs have different strengths, serve a different purpose and show their own investment dynamics. Insights Global has presence at all these ports. We have the statistics and local knowledge to help investment companies value storage assets they would like to include in their investment portfolio.

Jacob van den Berge, M&S manager Insights Global

What technology area do you expect to be a game-changer?

Welcome to “GRIPPING THOUGHTS”, the space created by Insights Global where Clients, Partners and Friends are invited to share ideas and insights that help shedding light on the challenges that the Oil & Gas industry faces, in the near and long future.

So join us and get inspired by IVAR BERNTZ, Research Analyst in the Cross-Industry and Advanced Manufacturing Group at GARTNER :

“Gartner recently released the results of their 2019 CIO Survey Oil and Gast Industry insights , based on 84 responses out of the 3,102 overall respondents from 89 countries. Let us discuss two of the questions posed, namely: 1) What is your organization’s top priority for 2018/2019? and 2) What technology area do you expect to be a game-changer for your organization?

Through 2018 oil and gas firms have made continued significant progress improving efficiency. With improving balance sheets and leaner operations, it is unsurprising that oil and gas executives are strongly focused on revenue and business growth as their top priority, as stated by 28% of the respondents. Caution, however, is still in evidence since the recovery is recent and market conditions remain volatile. Operational excellence  provides a relatively low-risk route to growth and profitability and is the priority for 26% of respondents.

Oil and gas company executives, senior leaders and functional managers are embracing digital. This year 22% of survey respondents rated it as top priority, compared with only 8% last year. Recognition of the capacity of digital innovation to both optimize and transform business models has crossed a tipping point in the industry, significantly elevating digital as a priority. Nevertheless, companies in most other industries are more likely to prioritize digital, a sign that traditional oil and gas industry inertia has not disappeared. Progress may be rapid by oil and gas standards but is only just keeping pace with trends outside the industry.

The oil and gas industry’s striking enthusiasm for analytics continues unabated, with 44% of oil and gas CIOs expecting data analytics to be the top game-changing technology  for the industry this year — double the percentage across  industries. Despite occasional mixed results and scepticism of vendor promises, analytics has gained widespread acceptance based on multiplying use cases and demonstrated value. As digital ambitions intensify, analytics is consistently prioritized by oil and gas leadership seeking proven ways to derive business value from digital technologies.

The greatly elevated priority of the IoT is new, with 24% of respondents now identifying it as a game-changing technology compared to 8% last year. As companies deal with existing inefficiencies, continued pursuit of operational excellence demands new strategies to improve asset performance, driving greater use of analytics for simulation and prediction of future behaviour. Analytics’ focus also shifts from reactive modelling offline to nearer real time. IoT offers advantages in data collection and system responsiveness over legacy systems to support this. However, cost-benefit considerations have so far acted as a brake on adoption, especially on mature assets. With renewed business growth the comparative advantages (and increasing cost-effectiveness) of IoT promise performance differentiation that will accelerate take-up.

A stark difference between oil and gas and all industries is apparent in artificial intelligence/machine learning. Across all industries, artificial intelligence/machine learning is ranked as the No. 1 game-changing technology across all three categories of performers, with 40% of top performers placing it at the top. While it is the third-most-cited, game-changing technology in oil and gas, only 21% of industry CIOs rate it as the top technology.

In part, this reflects the natural mistrust of the industry to hyped technology. Many oil and gas operators are still exploring ML and AI use cases and have yet to operationalize it. Understanding is more concrete for other technologies today, which — given the asset-centric nature of the business — are also expected to deliver significant value leading to a more even spread of expectation. Nevertheless, the growth of AI and ML, along with the elevation of IoT, indicates a shift in focus in the industry toward greater real-time connectivity and prediction for asset optimization.

Given this background, what do you believe will be your organization’s top priority for 2019 and what technology will be a game changer to accomplish it?”

PS: if you want to contribute to “Gripping Thoughts” please send an email to acavalcanti@insights-global.com
Find here other “Gripping Thoughts” articles:

Read now the interview with Bertrand Chupin, VP of the Loading Systems business unit of TechnipFMC, a global leader in subsea, onshore/offshore and surface projects, with about 37,000 employees.

Profit drivers for physical traders

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INTRODUCTION

This is the second blog article of our series of 5 blog articles made for you to be able to better understand the drivers and the complexity of the tank storage industry. In the first article we took a closer look at the functions of a tank terminal.

HOW DO TRADERS MAKE MONEY?

Traders can take a physical (&paper) position and ‘buy low / sell high’ to be able to make profit. There are several strategies to profit from trading physical commodities. We can distinguish three main strategies:

1.Arbitrage
2.Speculation
3.Optionality

ARBITRAGE

Arbitrage is a very simple idea, it is really taking advantage in the difference of price on essentially the same product, to make profit. For example if you would have the price of gasoline in two different geographical markets. These different markets can be the Netherlands (A) and the US (B). If in market A the price would 1 dollar and in market B the price would be 2 dollars, then you can profit from the difference in price. The three main types of arbitrage are:

1.Geographical arbitrage
2.Time arbitrage
3.Technical arbitrage (blending)

SPECULATION

The U.S. Commodities Future Trading Commission defines a speculator as a trader who does not hedge, but who trades with the objective of achieving profits through the successful anticipation of price movements. Traders take a position in anticipation of moves in prices/spreads. For example with the gasoil price as is shown in the chart below:

OPTIONALITY

As for speculation, also for optionality volatility is key. Profit can come from market opportunities, where traders can limit losses if market turns against position. Three examples are:

  • Optionality during geographic arbitrage trade. For example divert ship if there is a better deal and reduce costs
  • Optionality during contango storage. Contango means that the spot price of oil is lower than future contract for oil
  • Optionality in transport mode. Can be applied when transport costs are market driven and volatile

CONCLUSION

More familiarity within this complex market can provide you with quick insights derived from the financial markets. By watching and following oil prices spreads and market volatility can provide you with a better picture of the market. Other trends like backwardation and contango are also important to understand and analyse, to be able to make intelligent decisions. More to come in the next blog article next week, meanwhile feel free to download last week’s tank terminal report. And try to test your comprehension of the subjects discussed.

For more information or any questions please do not hesitate to contact us.

Functions of tank terminals

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Introduction

During the coming weeks we will provide you with relevant information regarding the tank storage market and its influences and opportunities. This week we will focus on the different functions a tank terminal. It is the first of 5 blog articles for you to be able to better understand the drivers of this sector and help you with your commercial decisions.

Functions of a terminal

Tank terminals can have various functions, although commercial clients’ operational requirements tend to focus on the logistics/hub and trading platform functions. These three main functions are:

  • Logistics/hub – function
  • Trading platform
  • Strategic storage

Logistics/hub function

The logistics/hub function is firstly related to the make/break and bulk of the product(s). In addition we can observe an integrated approach between transport modalities such as sea, rail, road and pipeline. Also the correct integration with an industrial complex and buffer stock(s) are considered to be part of the logistical chain of a tank terminal.

Trading platform & Strategic storage

The tank storage activities can also be influenced by the financial markets, as investors, traders and other financial intermediates are active on various trading platforms. How do traders make money and why are they interested in the tank storage industry? Mainly by taking a physical (&paper) position(s), traders take advantage of a price differences between two or more instruments. They will make profit if there is a combination of matching deals that capitalize upon the imbalance. As a trading platform four important factors can be described:

  1. Physical arbitrage
  2. Blending
  3. Contango storage
  4. Optionality

How does physical arbitrage work? During arbitrage the global commodity traders seek to identify and respond to supply and demand differentials between linked markets. Trading firms are essentially in the business of transforming commodities in space (logistics), in time (storage) and in form (processing). Traders with access to physical oil and storage can profit in a contango market, as the futures price of a commodity is above the expected spot price, and people are willing to pay more for a commodity at some point in the future than the actual expected price of the commodity. Besides this also optionality is very important as it builds in flexibility to profit from market opportunities and limits losses if the market turns against positions.

Conclusion

By focussing on the things that matter we can understand better how our clients are making money. As a result it can help shape your business, to have a better insight and to be able to make better operational and commercial decisions. By watching market indicators like the oil price level, market volatility and the forward curves it will provide a better picture of the market. This directly provides in-depth insights into the tank storage market developments. Our weekly report is specifically designed to clarify the mentioned above, and to provide a weekly market snapshot. If you would like more information please do not hesitate to contact me.

GREATER SINGAPORE TANK STORAGE MARKET OUTLOOK 2018 – PART 2

Click here if you missed Part 1 of the article “Greater Singapore Tank Storage Market Outlook 2018”.

Singapore naturally has a vast deficit of fuel oil as local production is only modest while demand is of unparalleled size. Large imports of fuel oil allow Singapore to fulfill its hub function.

THE IMPACT OF IMO 2020 – A GAME CHANGER

Fuel oil demand primarily comes from marine bunker activity and is therefore submissive to a large change following the IMO 2020 regulations, which require lower sulphur contents to be used in marine fuel.

Fuel oil generally is high on sulphur and will thus see a sharp decline in demand from 2020 onwards when high-sulphur fuel oil is replaced by, among other alternatives, diesel oil. After 2020 demand will gradually pick up as a result of growing economies and populations, but its share in marine bunkering will remain low.

The immediate switch from fuel oil to alternatives will provoke a surplus of the product for most countries in the region, while Singapore will continue to have a deficit, be it smaller than before. The region in whole will have a surplus in the short run, lowering fuel oil trade flows from other continents to Asia.

TRADE IMBALANCES WILL CONTINUE INTENSIFYING TANK STORAGE USAGE

Diesel is Far East and the ISC’s largest refinery output category and together account for roughly 50% of the total. The main drivers for diesel demand are passenger cars with diesel engines, marine bunkers, building heating and industry. Passenger car fleet developments are of great importance to the demand for diesel. Since diesel does not propel the majority of cars in Far East and the ISC, the impact of car emissions regulations on diesel demand is limited. With growing populations and developing economies, the number of diesel-powered passenger cars is set to further increase in the future, despite more efficient engines, the increasing share of electric vehicles in the passenger car fleet and other environmental initiatives. IMO 2020 regulations, will increase the demand for diesel in the maritime sector. As of 2017 most of the region’s major producers and consumers of diesel have surplusses with the largest ones in China, India and South Korea. Australia, on the other hand, has quite a substantial deficit, meeting most of its diesel demand with imports.

China is the region’s largest producer of gasoline, followed by India and Japan. India and China have seen tremendous growth in their gasoline productions, both having doubled their output since 2009. The primary demand driver for gasoline is passenger cars, accounting for virtually the entire gasoline consumption. Passenger car fleet developments are therefore of even greater importance to gasoline than for diesel. Chinese demand for gasoline has more than doubled over the last decade despite strict emissions regulations but hasn’t outgrown production yet. Demand for gasoline is very sensitive to changes in car fuel usage, but the growing Chinese economy offsets the strict fuel policies of the country. India’s demand is still relatively low but growing rapidly, while Japanese demand naturally seems to be in decline. As for diesel, most of the major producers/consumers of gasoline had surplusses of the product in 2017.

Fuel oil has historically been Far East and the ISC’s third largest oil product in terms of demand. Simultaneously it’s Singapore’s largest product in terms of demand and trade volumes, since the country acts as the region’s largest marine bunker fuel hub. Local production is negligible, however, and Singapore fulfils demand through imports. The region has a deficit of the product despite increasing local production. Most fuel oil is produced by China and Japan, with China increasing its production while Japanese production is in decline. South Korean and Indian production is likewise in decline. Due to its hub function Singapore has the largest demand for fuel oil in the region, as a variety of ships from many different countries come to Singapore in search for the right propellant. China comes second in terms of demand, while Japanese fuel oil demand is only a third of what is was half a decade ago.

CONCLUSION

Relevant market fundamentals for the oil storage business are the shape of the forward curve, the competitive market structure and the logistical factors supply, demand, imbalances and trade flows. Tank terminals are part of the oil products supply chain and therefore logistical factors such as local product demand, regional refinery output, imbalances and trade flows are very relevant. Developments in these factors, as well as new regulations influence the demand and requirements for tank terminal capacity.

SINGAPORE TANK TERMINAL MARKET STUDY 2018

Based on extensive market research, Insights Global – in partnership with Ener8 Limited – has produced a +75 pages report providing insights into the Tank Terminal Market in both Singapore and the greater Singapore area.

Click here to download the table of contents.

For more information on how to purchase this report please contact info@insights-global.com

The impact of ARA barge transport on the feedstock within the petrochemical sector.

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Naphtha is an intermediate hydrocarbon liquid stream derived from the refining of crude oil. It is in the ARA region mostly used as a gasoline blending component as feedstock within the petrochemical sector. Other important feedstocks for the petrochemical sector include ethane, propane and methane. The petrochemical sector is responsible for producing various materials such as plastic, paints, solvents, fibres and raw materials for pharmaceutical and cosmetics sectors.
The ARA-region, or Amsterdam – Rotterdam – Antwerp region is an area in The Netherlands and Belgium where various coastal and inland ports are interconnected and act as a global hub. Apart from the large ports Amsterdam, Rotterdam and Antwerp it includes Flushing, Ghent, Terneuzen and Moerdijk as other relevant ports. All these ports lie in the delta of various rivers, like the Rhine, Meuse and Scheldt, which flow into the North Sea and could be seen as gateway of the European continent. Hinterland markets are connected to global markets via these seaports, in particular the vast hinterland of German industrial centres and population. The river Rhine, Scheldt and Meuse enable barge transport to and from these ports to inland markets, which give the market its unique attractiveness and improves the position of the hub in the worldwide trade flows. When we take a closer look at the feedstock prices we can observe that naphtha is the most expensive feedstock. In the image below you can see the historical monthly petrochemical feedstock prices from 2013 till 2018.

Although naphtha is the most expensive feedstock, it is the most used feedstock in the ARA region of all the substitutes mentioned above. There are various factors influencing this, but in this article we focus solely on the barge transport. As we have established earlier the Rhine has a unique position as being an important route for the transport of liquid bulk across different Western European countries. It is one of the world’s most frequented inland waterways. In Europe, there are more than 13.500 vessels offering inland freight transport services (dry cargo, tanker cargo and push & tug vessels) with a total loading capacity of 17 Mio tonnes. About 76% of the European fleet comes from Rhine countries. Source : Inland Navigation Europe. Tankers account for +- 15% of the total inland fleet.

Of the liquid bulk market, according to PJK’s interntional numbers you can see in the image below a comparison of the number of inland tankers showing that the clean (including chemical) tankers are far more dominant compared to gas tankers. While there are currently more gas tankers under construction, the same accounts for clean tankers. Clean tankers under construction are also bigger in terms of DWT, up to 10,000 DWT.

As mentioned before, naphtha is a liquid hydrocarbon mixture, which means it should be transported in double hull tanker, mainly to prevent cargo from leaking due to its hazardous nature. With regard to ethane and propane it is different as these are gases, and therefore have to be transported in special gas tankers, which are often fabricated with triple hulls and equipped with circular tanks. At the moment there are far more double hull tankers available in the market compared to the gas tankers, increasing supply of transport possibilities. Therefor the transport of naphtha is economically more feasible and accessible, despite the higher product costs.  Another reason for the high usage of naphtha in the region is the excess components received after cracking naphtha. These residues are used in the gasoline blending market, which holds a key position in the ARA and provide more usages of the excess valuable components like for example isomerate, raffinate, toluene and xylene. As you can see a lot of factors influence the petrochemical market. Are you struggling to connect the dots of the petrochemical side of the cluster? We can then provide you with our ARA Petrochemical Tank Storage report, where we aim to shed some light on complex subjects by unravelling trends and themes that underlie current markets relevant for the ARA cluster and by giving an outlook for future states of these petrochemical markets.  
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The contents of this article from Insights Global has been written with the greatest possible care. However, Insights Global cannot guarantee the accuracy or completeness of the information. The content of Insights Global blog publications therefore are not legally binding. Insights Global accepts no liability which might arise from the content of its blog.