RIGA - The Vitol Group, owner and operator of the Ventspils oil terminal, has said it plans to transform the terminal into a trading hub now that the business is increasingly dependent on seaborne crude deliveries.
The announcement is a departure somewhat from a year ago when, just after Vitol purchased a large stake in Ventspils Nafta, there were hopes that the Switzerland-based oil trading corporation could convince Russia to renew deliveries by pipeline, which are considerably cheaper than tanker-based shipments.
Vitol, however, is determined to make the best out of bad situation.
"We will use all opportunities to turn the terminal into an efficient trading hub, but it will need the right products, and it will have to meet the requirements of some countries to which we have never exported before. So this is our vision for the next three years," Rob Nijst, a Vitol official, told Dienas Bizness in an interview.
Nijst pointed out that Ventspils Nafta is receiving more oil and oil products by sea. "We have turned it into some kind of a trade terminal by ensuring cargo shipments by various routes 's the oil product pipeline, sea and railway 's and then forwarding them to the respective recipients," he said.
He said the terminal's infrastructure was fairly well developed but that some of the equipment was 35 years old.
Vitol would continue investing into infrastructure, though Nijst declined to give an approximate estimate.
"This will be an important investment. This is the largest terminal in the Baltics, and we have to maintain and improve the quality of existing infrastructure 's this is also an investment," he said.
Other investments would go toward optimizing the reloading process, improving health care and environment and upgrading the port's IT. Ventspils Naftas Terminals was founded in 2003 for handling operations with oil and oil products. The company belongs to Vitol and Ventspils Nafta.
Ventspils Nafta, in turn, is owned by several shareholders, though the biggest are Latvijas Naftas Tranzits and Vitol Group, which purchased nearly all the state's stake at an open auction in October 2006.
Ventspils Nafta also has interests in shipping and media.
Asked to predict the future dynamics of cargo handling at Ventspils Naftas Tranzits, Nijst said it is even difficult to make forecasts but projected that in 2008 cargo turnover at the terminal might stay at this year's level.
Vitol's Sam Labroza said the group is not planning to get actively involved in the operations of other Ventspils Nafta subsidiaries, including the Latvijas Kugnieciba (Lasco) shipping company.
"We are not interested in selling it at the moment. If [Ventspils Nafta] and its council of directors, as well as VN shareholders wanted to sell some assets, the decisions would have to be made by all shareholders," he said.
In 2006 VNT reloaded 5.7 million tons of oil and oil products, a 29.6 percent fall year-on-year.
In the first 10 months of this year, however, the terminal handled 11.2 million tons of oil and oil products, up 6.4 million tons from the same period last year.