The Port of Rotterdam Authority and its Russian partner have decided to terminate a long-standing contract calling for the construction of more than 3 million cubic meters of oil storage at the port.
In a joint press release issued Thursday, the Port Authority and Shtandart TT, a 100% subsidiary of the Summa Group (Russian Federation), announced the termination of the contract for the construction of the $1 billion Tank Terminal Europoort West, which was to include storage intended for the transit of Urals crude oil and oil products.
The Port Authority first launched an ‘open assessment procedure’ for the project in 2010, which led to the signed contract with Shtandart TT the following year. At the beginning of 2013, the Port Authority handed over the site to Shtandart ready for construction, and by early 2015 all of the building and environmental permits necessary for construction and operation of the terminal were in place.
The terminal was expected to go into operation in 2017.
The the press release said that contract includes agreements on the schedule and the quantities of crude oil and oil products that would be handled at the terminal, but Shtandart TT recently raised concerns over the feasibility of the project, which led to the decision to terminate the joint project.
The Port Authority does believe that it may be possible to develop the terminal concept with another interested party now that the site is available again.
In the first six months of 2015, handling of mineral oil products was up by more than 25% at the port primarily due to an increase in Russian fuel oil that is shipped to the Far East via Rotterdam. In the last decade, about 30% of the crude oil that arrived in Rotterdam came from Russia.
The press release says that the Port Authority is convinced that the termination of the Shtandart contract will not have an effect on the substantial volumes of crude oil and mineral oil products that are being shipped between Russia and Rotterdam.