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    Oystercatcher
    Singapore, Netherlands, Belgium, Malta

    Transport & logistics

    Oystercatcher

    Oystercatcher is the holding company through which the Company holds 45% interests in five subsidiaries of Oiltanking, located in Belgium, Malta, the Netherlands and Singapore.

    These businesses provide over five million cubic metres of oil, petroleum and other oil-related storage facilities and associated services to a broad range of clients, including private and state oil companies, refiners, petrochemical companies and traders.

    Oiltanking is one of the world’s leading independent storage partners for oils, chemicals and gases, operating 73 terminals in 22 countries with a total storage capacity of 19 million cubic metres.

    Follow-on investments

    We have been progressing a number of follow-on investment opportunities with the terminal companies.

    On 2 May 2017, Oiltanking Ghent acquired 100% of Belgotank NV, a company which owns 82,000 cubic metres of tank capacity located on the Oiltanking Ghent site. These provide a mix of small tanks which are complementary to the business’s existing tank portfolio. On 25 September 2017, Oystercatcher made a follow-on equity investment of €2.4 million  into Oiltanking Ghent to part fund that acquisition. 

    Developments in the year

    The five terminals all performed well operationally and financially during the year. Each terminal enjoys a strong position in its market and benefits from Oiltanking’s reputation for excellent customer service levels. Capacity across the portfolio remains substantially let.

    The introduction of stricter standards for sulphur content in fuel oil used by ships from 2020 is impacting parts of the storage sector. It has led to a deterioration in fuel oil trading margins and reduced traders’ appetite to store this product. This has caused a sudden drop in market-wide fuel oil storage rates and has resulted in some storage capacity that was being used for fuel oil to become available in the market. At the same time many product markets are in backwardation, with forward prices below current levels.

    In Singapore, the terminal is a leading gasoline storage and blending facility. Continuing strong growth in demand for gasoline in  the wider region underpins the positive outlook for the terminal in the long term.

    However, a small part of its business has been impacted by the marketwide drop in fuel oil storage rates.

    In Amsterdam and Ghent, we have seen some softening of demand for gasoil storage. Gasoil storage is only a small part of the activities at the European terminals, with activities being dominated by gasoline storage and blending, and also including jet fuel and chemicals storage.

    Investment rationale

    The investment in the Amsterdam, Malta and Singapore terminals was completed in August 2007, while the investment in the Ghent (Belgium) and Terneuzen (Netherlands) terminals was completed in June 2015.

    The key elements of the investment case for the terminals are:

    • There is strong projected demand for oil and oil-related products;
    • Storage capacity remains scarce and is a key component of the oil and oil product supply chain, resulting in high occupancy;
    • The businesses provide essential services and the terminals benefit from facilities and operational capabilities that make them attractive to existing and potential clients;
    • The Singapore and Amsterdam-Rotterdam-Antwerp region terminals are defensively located in key trading hubs and continue to benefit from high utilisation levels;
    • Contracts are let on a use-or-pay basis with fixed terms of up to 10 years, often with tariffs linked to local inflation rates, resulting in reliable cash flows; and

    The transactions allowed 3i Infrastructure to partner with a leading player in the oil storage market, with a strong operational reputation.

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