Eng. Mahasneh: A new bylaw for the Management of Fuel Storage and its Use in Emergencies

Amman: The General Manager of Jordan Oil Terminals Company (JOTC), Eng. Kholoud Mahasneh, said that "The Ministry of Energy and Mineral Resources is currently preparing the Kingdom's strategic stock management bylaw for petroleum products, which will outline the mechanism for its management and use in emergencies," She said.

Mahasneh clarified, in an interview with "Al-Ghad" Jordanian daily, that Jordan Oil Terminals Company (JOTC), had been established in 2015 under the decision of the Council of Ministers, and that the company had succeeded, in a short period of time, in achieving one of the objectives of the updated energy sector strategy announced in 2007, which included increasing the strategic petroleum stock of the Kingdom through the construction of Amman Strategic Terminal for Petroleum Products (ASTPP) in Madounah. This new terminal covers the Kingdom's demand for (30) days out of the (60) days targeted in the strategy. The remaining quantities are to be completed based on the results of the fourth Petroleum Refinery Company expansion project, while petroleum products marketing companies remain committed, under the licenses granted them, to maintain an operational reserve that covers 15 days of their sales.

Eng. Mahasneh also confirmed that JOTC is committed to develop the infrastructure of the petroleum sector and serve operators licensed Oil Marketing Companies and Liquified Petroleum Gas (LPG) companies in a fair and non-discriminatory manner.

Eng. Mahasneh pointed to the importance of JOTC's role in achieving fair and effective competition in the Petroleum sector, which serves the national economy through the adoption of the Open-Access principles in the allocation of capacities in the company's petroleum terminals, noting that the company had taken responsibility for building the capacity of Jordanian professionals and technicians in this business, and attracting distinguished expatriate Jordanians working in petroleum sectors abroad to manage, operate and sustain these terminals in accordance with the best HSE practices.

On the other hand, Mahasneh indicated that the Government of Jordan does not obligate the mentioned companies to use JOTC's terminals, at a time when other storage companies compete to store petroleum products at their facilities in Aqaba, offering lower standards; hence, lower storage rates, thus creating a major challenge for JOTC to achieve the objectives it was established to achieve.

She pointed out that JOTC, in accordance with the decision of the Council of Ministers No. (14469) dated 13/3/2016 is committed to operating on purely commercial and profitable bases, and that the company has been successful in implementing this decision so far, as JOTC's revenues are derived from the terminalling services agreements signed with the marketing companies and LPG bulk distribution companies in Aqaba Oil Terminal (AOT). These companies import petroleum products to be stored in JOTC's tanks in Aqaba Oil Terminal (AOT), where they are loaded into tank trucks and distributed to the customer’s petrol stations and their industrial and business customers.

As for the cost of storage of the strategic stock owned by the government and the process for its refreshment, Eng. Mahasneh indicated that an agreement would be signed for the storage and management of strategic stocks between the government and JOTC, and confirmed that the government will allocate the required budget for this purpose next year, as these storage and management costs had been implicitly included in the financial relationship between the Government and the Jordanian Petroleum Refinery Company, which ended on May the 1st 2018.

On the projects implemented and managed by the company in Madouna, Amman Strategic Terminal for Petroleum Products (ASTPP), Mahasneh explained that the cost of the (ASTPP) reached $ 210 million funded by the Abu Dhabi Fund for Development. This strategic terminal, Eng. Mahasneh clarified, provide strategic reserves that cover the Kingdom's demand for (34) days of diesel, (30) days of gasoline and (34) days of jet fuel, as well as increasing the Kingdom's capacity to store LPG to become sufficient for about (16) days.

In view of the Kingdom's need to provide additional strategic storage capacity for LPG, Al Mahasneh said: "The variation order for the construction of additional three LPG spheres has been signed to raise storage capacity to 16,000 tons in Amman." She clarified that "the expansion project will be undertaken within maximum (30) months, at a total cost of JOD (20) million, the bulk of which will be financed through the remaining amount of the UAE grant via the Abu Dhabi Development Fund amounting to JOD (15) million, while JOTC will cover the remaining amount."

As for the Aqaba Oil Terminal (AOT), they include tanks for petroleum products with a capacity of (100) thousand tons and (6) thousand tons of (LPG). The ownership of the oil terminals was transferred from the Ministry of Energy and Mineral Resources to JOTC under the decision of the Council of Ministers in May 2017. Mahasneh added that the cost of Aqaba projects is about JOD (44.2) million for the petroleum products reserves and JOD (17) million for the LPG tanks project.

Mahasneh clarified that by the agreement with Total and Manaseer, JOTC stores gasoline, where gasoline 90 is kept in 5 tanks, while gasoline 95 is retained in the sixth tank. She added that LPG storage capacity was not fully utilised by JOTC, because almost 99% of LPG is imported by Jordan Petroleum Refinery Company (JPRC), where it is stored in its own spheres.

“The company also owns five tanks in Aqaba with a capacity of 210 thousand cubic meters for the storage of heavy fuel, which is currently used by Jordan Petroleum Refinery Company to store the surplus of the production of this material to be exported abroad", Eng. Mahasneh pointed out.

In this regard, She clarified that the Jordanian Government was negotiating with the Jordanian Petroleum Refinery Company to purchase 49% of its assets in Aqaba, as well as the aircraft supply stations at the three airports to be transferred to JOTC, including the transfer of about 400 employees currently working in these facilities, where JOTC will work on updating and developing these assets, raising the level of work and retraining and qualifying of the staff.

Referring to the most important challenges facing the company today, Mahasneh said that the most important is competition with private companies that offer tariffs lower than the tariff set by the government for storage operations, an issue which is currently addressed by the Energy & Minerals Commission, which is studying the subject and working on restructuring the regulated tariff to take into consideration the services provided on the basis of open use in order to help cover the cost of services and achieve a fair rate of return on assets for the government which invested in them. She added that there is a need to apply consistently the construction and operations standards on all storage companies in Jordan, and these standards have to be at par with international ones.

As for the future projects of the company, JOTC's General Manager, Eng. Kholoud Mahasneh said that "they are focused on acquiring the logistics assets of JPRC in Aqaba and airports to JOTC, in order to provide airports and ships with petroleum products, in addition to the completion of the construction of additional three sphere tanks in Amman Strategic Terminal for Petroleum Products (ASTPP) and the operation of the terminals according to international best practices.

It is worth mentioning that the JOTC was founded in August 2015 pursuant to the decision of the Council of Ministers to be a private shareholding company, wholly owned by the Government of the Hashemite Kingdom of Jordan. It was established to speed up the implementation of the restructuring of the oil and gas sector in line with the National Energy Strategy. JOTC will serve two goals: promoting competition in this sector and ensuring the security of supply of petroleum products to Jordan at all times.

JOTC operates on a purely commercial and profitable basis and does not constitute a burden on the government budget. It efficiently manages and operates its facilities according to the best international practices in the field of oil and gas. The company started full commercial operation earlier this year.

This article was published originally in Arabic by Alghad Newspaper, and can be accessed online at: https://alghad.com/%D9%85%D8%AD%D8%A7%D8%B3%D9%86%D8%A9-%D9%86%D8%B8%D8%A7%D9%85-%D8%AD%D9%83%D9%88%D9%85%D9%8A-%D9%84%D8%A5%D8%AF%D8%A7%D8%B1%D8%A9-%D9%85%D8%AE%D8%B2%D9%88%D9%86-%D8%A7%D9%84%D9%85%D8%AD%D8%B1%D9%88/

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