AS CEO of TankBank International Singapore, Tony Quinn has originated over $2.5 billion of terminal sales and acquisitions since 2013.

He has worked in senior management positions for BP, Castrol, and Simon Storage Group in the United Kingdom, and was also CEO of Mabanaft London Ltd. Quinn is one of the most respected advisors to the oil and chemical storage industry globally.

In his presentation, “A Global Perspective on Liquid Storage,” Quinn took the audience on a trip around the world, analyzing the infrastructure at key global sites. He delivered his presentation during the International Liquid Terminals Association’s 37th Annual International Operating Conference held June 12 and 13 in Houston, Texas.

Rotterdam.

“Of the whole of the Amsterdam/Rotterdam/Antwerp region (Belgium and The Netherlands), Rotterdam was the hub. We’re seeing a declining refining position in Europe where they are not able to generate quality fuels through current refinery operations. There is a lot of downtime now and the refineries are starting to close or turning to storage positions. I’m not fond of that because if you’ve got a refinery that’s got tanks, it’s got tanks because of the refinery. You take the refinery away and try to run tanks on their own and you probably find somebody’s got that tank position nearby. It has been a success on a couple of isolated occasions, but in general it’s not. There were plans for a huge terminal, which Mr Putin (Russian president Vladimir Putin) put money into, but it never happened. It just fizzled out. So the significance of Rotterdam is it’s pretty flat. This is a mature market. Europe generally is a mature market.”

Antwerp.

“It’s traditionally been the chemical hub for Europe, whereas Rotterdam was the crude hub. There are 15 different storage companies playing in this market. Development wise, SEA-Tank has been the big developer here. They built up two million cubic meters of storage that weren’t there six or seven years ago. But a lot of the other traditional businesses are still on a chemical basis and working for small chemical producers. Their roots of supply have changed because now product is not coming from Europe. It’s coming from Saudi Arabia.”

Amsterdam.

“There has been some interesting investment here. An old BP facility was bought recently by Zenith Energy. Zenith had moved into the European market. The problem here was the seller. The seller was this little company called BP. If you’re selling a terminal, the last thing you want to tell them is the market is going that way, and, ‘By the way, we’re pulling all of our product out.’ They were almost too honest. I’ve never seen an IM that’s that honest. Usually it’s the other way around. Zenith got a great deal. The problem for Zenith is that there is a new terminal next door. There are a lot of terminals, so they’ve got their job cut out for them.”

United Kingdom.

“This is actually the deepest water in Europe at 24 meters (79 feet). It doesn’t sound too deep to some parts of the world. The UK market is extremely static. I used to run a terminal business in the UK, and that was one of the most profitable businesses in Europe. Not because I was there but because the market was good. But it’s now become very static. Britain is an island. God knows how Brexit and the political shenanigans we’re having over there are going to affect this business. But the market is generally static, so we’re not seeing great improvements. Even the Spanish have gone in and bought out the UK pipeline system. There’s lot of investment going in but no new development.”

Poland.

“They are beautiful terminals. They have 11 around Poland and they are all connected by pipeline. It’s like a mini-US. It’s fantastic. It’s really high quality, and when they come to sell it, they expect high prices.”

Germany.

“Germany had an initial flurry of activity around 2005 when Macquarie invested in a lot of businesses along the Rhine. The German business is suffering like the UK. It’s particularly static at the moment. We’ve not seen any strategic infrastructure investment apart from around the Hamburg region, where there’s been some refurbishing of the refineries.”

Turkey.

“A four-million-barrel storage terminal sits on the end of some of major pipelines coming into the Mediterranean from Russia. It also handles a lot of Iraqi road transport. And there’s a queue of trucks coming in for miles up the road, discharging crude oil from small tank trucks. They’re only coming in 40-tonne (88,184-lb) trucks. There’s been a bit of a change in ownership.”

Croatia.

“No one tends to think of Croatia as being a significant oil storage area, but it is. The JANAF terminal is probably a terminal nobody in the room has heard of, but it has something very significant. This has the second-deepest water in the Mediterranean, and it’s still 26 meters (85.3 feet) so it’s still not ultra-deep. But 26 meters will bring in the largest ships with crude into Europe. It has deeper water than Rotterdam. This terminal has a crude pipeline that feeds the entire European network. So it goes up from Croatia by Italy and feeds all the way up into northern Europe, and it’s fed from pipelines coming in from eastern Europe and feeds product and crude into north and western Europe. It’s a very sensitive, very protected terminal.”

Spain.

“The Spanish system is dominated by a company called CLH. They have 42 terminals and 35 million barrels of capacity. They’ve got a very intensive pipeline infrastructure that links them all. Spain is a highly integrated country that can feed every area, including the islands, with their fuel stock coming up through refineries in the south of Spain and delivering into northern networks and the rest of Europe. But their refineries are suffering because they are older and are not able to compete with the new grades of product. They are still on high sulfur. It’s not good. The position for refineries is not good. The position for terminals is static. But there is a great infrastructure around them and great pipelines throughout that region.”

Israel.

“It’s structurally important for anyone involved in oil trading. In 1976, Marc Rich, Pinky Green, and a few others decided to develop a terminal in Ashkelon. In conjunction with the Iranian and Israeli governments, they built a pipeline to feed the Red Sea from the Mediterranean. The first user of that line was Marc Rich International. It’s quite incredible because it’s just across the border from Gaza, so they did have a lot of problems with rockets. The intriguing thing is we think about our terminals and all the terrorism things that go on in our world, and we don’t tend to think of it until you go to a terminal that has a bomb structural shelter over its housings. They’ve had things drop on that terminal.”

UAE-Fujairah.

“In 1997, I went to the opening of a brand new terminal in this really weird, out-of-the-way place called Fujairah. I ended up in this dusty patch of land where an investing group cut the ribbon on this square of dust and signed a deal with the Emirates National Oil Company (ENOC) to build a terminal. It went nuts. That’s because Fujairah is on the other side—most of coastline sits on Arabian Gulf side. This terminal on this land is on the other side that sits on the Indian Ocean. So to put a facility in here means shipping didn’t have to pass through the Gulf to refuel. This particular location became an enormous fuel station basically for this part of the world, and that’s why today it is the second-largest fuel hub in the world. The terminals have been built up significantly since 1997. But actually not much happened until 2006 through 2008, when we started to see some of the trade getting into the business. They have a problem. Most of the terminals built in this region were built from 2012 through 2015. Most of these guys have never seen a downturn in the market ever. They’re all new boys. They’ve got more lines and now they’re trying to sell everything. There are 11 for sale now.”

India.

“The largest independent in India is IMC. This is a difficult place to work. It’s a great country. But it’s very difficult to get to the people to get to the deals to make sure you’re going to make money out of the deal without suddenly realizing that the product losses are slipping away because somebody has a pipeline near one of your tanks. But there are worse.”

Sri Lanka.

“Sri Lanka is becoming a new hub because of the difficulties with investing in India. In the southern part of Sri Lanka, you had a lot of destruction from the 2004 tsunami. They were left with a lot of land that needed development. The Chinese invested heavily and are building like crazy. Now they’re getting into terminals. They’re starting to take business off the east coast of India, and it’s very likely they will succeed.”

China.

“They are the biggest buyers in all of the world. They overtook the United States a few years ago, because obviously the US generating so much internally. You can lose your shirt in China. I’ve done quite a bit of business here. You have to do deals very cleverly with private people you know and have known for a long time. You have to know everyone.”   ♦