22-07-08 India's Reliance Industries Ltd (RIL) is scouting for oil storages globally to market the huge volume of clean products from its new refinery coming online this quarter, company and trade sources said. Industry sources said RIL had already acquired some petroleum storage tanks in the Caribbean.
"I've heard they have possibly taken up storage in Panama, but I'm not sure of the details," a senior trader with a European oil major said.

The storages will serve as intermediate points for Reliance to tap the distribution areas, mainly in Western markets where the firm aims to supply its premium oil products. In Asia, it is aiming to lease tanks in the Singapore oil hub. The company's 580,000 bpd export-oriented plant is expected to be commissioned in September, to enable the firm to position itself as a swing supplier for markets in Europe, Latin America and East Africa, taking advantage of delays and cost overruns faced by other big refinery projects.
"Yes, we are looking at having storage atvarious countries to sell our products to cash in as and when an opportunity arises," a Reliance official said.

Earlier this year, Reliance allocated term diesel to selected trading houses for June 2008-May 2009 supplies, including first cargoes from the new plant. The refiner also recently concluded two term deals to supply a total 540,000 tons of gasoline for the second-half of the year.
A senior Reliance official had said In December, the firm was eyeing direct sale of its fuel to Europe and the United States.

Focus on Western markets
Traders said the latest term supply deals would still leave Reliance with more than enough products to ship out on a spot basis when the new refinery comes onstream. It currently operates a 660,000-bpd refinery at Jamnagar in India's western Gujarat state. Singapore-based industry sources said Reliance officials had also visited the city-state recently in its search for clean oil storage leases.
"Yes, they were here talking with most of the terminal operators, but as you know we are pretty tight here in Singapore, if they wanted to get anything now, it would have to be on a sub-lease basis," a Singapore-based tank storage operator said, adding that Reliance was looking for long-term storage.

Analysts said that Reliance's first priority would be to take storage in the West.
"Given the high quality of the products that will be coming out of their new refinery, the first place they will be looking to get some storage will be close to the European markets, which will be a major outlet for them," said Victor Shum, senior principal at consulting firm Purvin & Gertz.

Shum said he did not see Asia as a first priority for Reliance because the region was already amply supplied.
"In Asia, they would be looking at the likes of Indonesia, maybe Vietnam. But the region is already well supplied, so they would have plenty of competition for those outlets," he said. He added that storage in the Caribbean would allow Reliance to meet demand from the US Gulf Coast and Latin America. The new $ 6 bn project, along with the existing refinery, will make the Jamnagar complex the world's largest with a capacity of 1.24 mm bpd.