The role of logistics, terminals and storage services providers

Logistics, terminals and storage for the downstream industry are very important in deciding the economic progress of every nation

Martin Menachery is the editor of Refining & Petrochemicals Middle East.
Martin Menachery is the editor of Refining & Petrochemicals Middle East.

In the downstream industry, the processed natural gas and oil products need to be transported to different places where it is sold, used, or redistributed, using the conventional methods like trucking, rail and boat shipment, and pipelines. The products created by the downstream sector are products nearly everyone in the society will come into contact on daily basis, without which the quality of life would be drastically different for everyone. This is why the logistics, terminals and storage for the downstream industry are so important in deciding the economic progress of every nation.

As explained in the Knowledge Partner column (pages 30-31) of this Special Report, Khalifa Industrial Zone (KIZAD) recently launched KIZAD Polymers Park, which will form an integral part of the polymer conversion ecosystem in the UAE. The park aims to be a major economic driver for the UAE, producing 300-400 kilo tonnes of plastic products a year, creating up to 7,000 new jobs, and contributing $2.5bn to GDP by 2025.

As further detailed in the column, the potential export market for the park is estimated at $500mn annually, and it will ensure Abu Dhabi is a hub for developing the latest innovations in sustainability and technology in the industry, including new and advanced polymer technologies, such as composites and 3D printing.

As elaborated in the column, KIZAD Polymers Park will cater to a variety of different polymer segments, including industrial use, such as packaging, construction, and semi-finished products; end-use customer, such as household goods, agriculture and hygiene products; and material science, including compounded and composite materials, and 3D Printing. Crucial to supporting the circular economy are polymer recycling companies. The park will host a vibrant polymer ecosystem, including diversified polymer space and raw materials, production systems and technical support, polymer distribution and trading, and logistics.

The Market Focus section (pages 28-29) in this Special Report elaborates on the impending regulation by the International Maritime Organization (IMO), a sanctioning body for the world’s shipping fleet, aiming to significantly reduce the amount of sulphur in bunker fuels that are relied on for commercial shipping. Collectively, these ships burn more than three million barrels a day of residual fuel oil, which has a sulphur content that exceeds levels found in automotive gasoline by more than 1,000 times. Burning fuels with a higher sulphur content leads to a greater level of toxic air emissions, including sulphur oxides, which are considered a threat to the environment and human health.

As clarified in the section, the IMO confirmed in 2016 that global refiners and shippers would have to comply with these new environmental regulations by 2020 – five years earlier than many anticipated, which sent tidal waves through two industries that typically take many years to adapt to such significant change that requires tens of billions in investment. As explained, the IMO regulation on bunker fuels to be with less than 0.50% sulphur levels from 1 January 2020 will result in higher freight costs for most cargoes – including electronics, autos, and petrochemicals.

It is interesting to mention here that, last year, RSA-TALKE, a joint venture of Dubai-based third party logistics provider RSA Global, and Germany-based TALKE Group, announced the expansion of its portfolio of services for customers across the GCC with the completion and opening of its new dangerous goods warehouse. The opening of the new dangerous goods warehouse in JAFZA marks the next phase in establishing RSA-TALKE’s integrated chemical logistics hub as a one-of-a-kind facility in the region, with two fully automated liquid filling lines coming in the near future.

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