Portfolio
  • oystercatcher.png
    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

    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 oil storage market has continued to face challenges caused by an extended period of backwardation in oil product markets, alongside uncertainty in the bunker fuel market in the lead up to the introduction, on 1 January 2020, of the International Maritime Organisation’s new regulation restricting the sulphur content of fuel used for shipping (‘IMO 2020’).

    We expect the market backdrop to improve later in 2019 as implementation of IMO 2020 nears. Furthermore, the oil products market will continue to switch between periods of backwardation and contango.

    The high quality of the Oystercatcher portfolio provides significant protection against the adverse impacts of market conditions. An example is the signing in the year of a new long-term contract for jet fuel storage, taking advantage of the existing dedicated pipeline from Oiltanking Amsterdam to Schiphol airport.

    The biggest contributor to value is Oiltanking Singapore. In the medium to long term, a growing imbalance between demand for and supply of gasoline storage in the Asia Pacific region underpins our expectation that the storage market in Singapore will again strengthen.

    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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