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Indian company invests AED 477 million in oil facility in Fujairah
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Tuesday, 18 Sep 2012
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Gulf News reported that India’s Infrastructure Leasing & Financial Services Limited and UAE based Prime Terminal are pumping in AED 477 million in an oil storage terminal at Fujairah.

IL&FS Prime Terminals, a JV formed between IL&FS Maritime Infrastructure Company Limited and PTF reached an agreement on the Phase I of the 632,678 cubic meters project. This will help boost the fuel storage capacity to increase from 5.08 million cubic meters to 7.95 million cubic meters.

Mr Shahzaad Dalal chairman and CEO of IL&FS Investment Advisors said that construction of the project has already started with ANC carrying out earthworks for 14 storage tanks. The main construction package is currently in tendering phase. Three consortia have placed bids for the project. The land has been obtained from the Fujairah government on 50 years lease. Expects full return on investment in eight to 10 years.

Four local and Indian banks led by Bank of Baroda will provide project finance to the tune of USD 91 million for the project for a tenor of 7 years. National Bank of Fujairah, EXIM Bank of India and ICICI Bank are the other lenders. IL&FS Global Financial Services Limited acted as financial advisors for the project.

The Port of Fujairah is the second largest bunkering facility in the world with an annual throughput of 24 million tonnes. Commissioning of the 424 kilometers pipeline from Habshan to Fujairah gives Abu Dhabi a very vital alternative to export oil without having to pass the volatile Strait of Hormuz. This is in turn is expected to boost demand for oil storage facilities in Fujairah. Promoted by the IL&FS Group, this is IMICL’s first foray in the Middle East.

The IL&FS Group, widely regarded as the pioneer of public private partnership projects in India, is seeking to leverage on its expertise and experience of over two decades to develop infrastructure projects in the Middle East and Africa.

Owned 80% by IMICL and 20% by PTF, the oil storage tank terminal project at Fujairah will have a total capacity of 632,678 cubic meters, of which 333,088 cubic meters will be implemented in the Phase I. Construction is currently underway and this phase would be completed in 24 months. The project is located within the Fujairah Zone for petroleum industry adjacent to the Port of Fujairah. The project will have 14 storage tanks and support facilities and will be operated by IMICL.

Mr Dalal said that “This project marks an important step for IL&FS which seeks to expand its expertise in developing, executing and managing BOT infrastructure projects in the fast growing Middle Eastern and African markets. As there is a great need to develop infrastructure in these regions, many Governments are turning to experienced private sector players who can efficiently implement projects.”

Source - Gulf News

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