Magazine’s Julian Walker spoke exclusively to Vopak’s CEO Eelco Hoekstra about the growing importance of the Middle East market and preparing for the new energy landscape
How has Vopak reacted to the transiting energy landscape?
Royal Vopak has always been and is a company with a long term view. In our 400 years of history we have been able to adjust and position ourselves to support new developments in global trade. We have a global network and we store a broad range of products for our customers, ranging from oil, chemicals, gases and LNG to biofuels and vegoils; products that are are vital to the various economies and our daily lives.
The energy transition is a global transformation that is following different pathways in different parts of the world, depending on local issues and priorities.
A substantial part of world population is still without access to electricity or clean cooking facilities, the energy transition for this group is first and foremost about ending energy poverty.
In megacities from Singapore to Shanghai, from Mexico to Mumbai and from Lagos to our home city Rotterdam, there is a struggle for clean air for their citizens to breathe by curbing emissions like SOx and NOx.
Finally, governments, citizens, companies and NGO’s around the world are committed to curbing CO2 emissions and combat climate change, in line with the Paris Agreement.
In other words, while the focus is commonly set on only reducing CO2 emissions, the energy transition is a complex of interlinked transformations in energy systems around the world, driven by societal demands which range from basic access to energy and clean cooking facilities to demands for clean air and combatting climate change.
These developments will structurally change the oil and gas industry, including the role of infrastructure and storage. Vopak wants to play its part to facilitate the energy transition around the globe, today, tomorrow and in the next decades. We observe that technology and the lack of adequate infrastructure to distribute energy to the right location against the right price, are two of the main hurdles to success. With our global network of independent terminals, our strong operational capabilities and deep market knowledge, Vopak is ideally positioned to develop into a key infrastructure player facilitating the energy transition. We are continuously exploring the new energy landscape together with our customers and other stakeholders looking for possibilities to contribute to solutions in support of a new energy future.
How can ports play a key role in the changing role for oil storage facilities?
Ports are with their concentration of industries the place where with smart solutions initiatives can be developed with big impact. Like using residual heat, facilitating cleaner fuels, capture and storage of CO2, hydrogen production etc.
Do you see Middle East region as an important growth market for bunkering services?
We see the Middle East as a very important market, both for bunkering as for its world-scale chemical and refining complexes. Related to bunkering we strongly belief in the strategic position of Fujairah at the mouth of the Strait of Hormuz on the eastern side of United Arab Emirates (UAE) outside the Gulf. We our proud that our joint venture Vopak Horizon Fujairah with its jetty, SPM and connection to the port-jetties takes a leading position in this important bunker market.
How can technology help ports and oil storage facilities adapt to the changing energy landscape?
First of all new technology such as sensors and sophisticated algorithms will help us reduce safety incidents, improve service through better traceability and planning, and lower costs by working more efficiently and saving energy. Besides that new technology might bring new energy solutions like storage of energy in ammonia or hydrogen.
How are you implementing greater digitisation across your network of terminals?
Technology leadership is one of our strategic focus areas, which will support our future success. For that reason, we have created within Vopak a dedicated Digital Innovation Team comprised of experienced talents from the terminals and external hires. We strongly believe in this combination of internal professionals with in-depth knowledge of our processes in combination with external professionals familiar with the new technology. These can also be small start-up companies specialised on a specific new technique. We are happy to experience the first positive results from this approach.
How can oil storage contribute to energy future? What is Vopak doing in this area?
In the short to medium term, we anticipate a gradual shift from coal and oil to gas, as well as a shift from heavy fuels to cleaner petroleum products. At the same time, we will continue to store and handle with care a broad range of vital products, by continuously improving our performance on safety, health and the environment. For the longer term, staying relevant to society and to the market demands that Vopak readies itself to facilitate new product fl ows, such as CO2, ammonia or hydrogen, depending on technological breakthroughs in energy storage and on societal choices. This is why we are participating in pilot projects to explore the potential and technical and infrastructure requirements of such new products that will be key to the success of the energy transition.