VTTI placing Cyprus on the Oil Trading Map 19 June PDF Free Download

VTTI placing Cyprus on the Oil Trading Map 19 June 2018

VTTI offers oil storage solutions in strategic locations, in a way that is fast, flexible, safe and environmentally sound. We are importantly driven by the needs of our customers. A fast-growing independent provider of energy storage worldwide, we store, handle and connect oil flows around the world. WELCOME TO CONNECTED THINKING.

Global Footprint We own and operate 16 terminals in strategic locations Located across 5 continents With a combined capacity of 10 million m³ CURRENT TERMINALS Europe 6 / 5,199 km3 Africa 2 / 127 km3 M-E 1 / 1,180 km3 F-E 1 / 893 km3 Americas 2 / 670 km3 SEAPORT CANAVERAL, USA ETA, NETHERLANDS ETT, NETHERLANDS ATPC, BELGIUM BNK, RUSSIA VNT, LATVIA VTTV, CYPRUS CURRENT PROJECTS Africa 1 / 118 km3 M-E 1 / 410 km3 F-E 1 / 260 km3 Americas 1 / 3 km3 VIRGIN ISLANDS, USA NAVGAS, NIGERIA ATB, MALAYSIA VITCO, ARGENTINA CAPE TOWN, SOUTH AFRICA VTTI FTL, UAE VTTI, KENYA

TERMINALS VASILIKO CYPRUS ( 300 million investment) THE MEDITERRANEAN S NEW ENERGY HUB. CAPACITY (m 3 ) 544,000 + 305,000 Expansion (Phase 2) NUMBER OF TANKS 28 NUMBER OF JETTIES 4 MAXIMUM DRAFT (M) 17 PRODUCT SCOPE DETAILS Minerals Chemicals Gasoline Petrochemicals Jet fuel Kerosene Naphtha Gasoil Diesel Fuel Oil (2 nd phase) Strategic location connecting the vibrant trading areas of Southern Europe, the Middle East and Asia Deep water access, accommodating up to Suezmax (160K DWT) as well as road tanker loading facilities Private single T jetty with four berthing positions Approximately 190,000 cbm K1 / 350,000 cbm MD Phase 2 under review approximately 305,000 cbm for fuel oil / crude

The Tank Farm T-602

The Marine Jetty 4 berths handling all oil products Loading arms capable of loading / discharge 1800m³/h per loading arm Jetty extends off-shore 1500m to deep water Berths 1 & 2: Draft 17m (50K 160K DWT) Berths 3 & 4: Draft 13m (5K 50K DWT) Berth 2 Berth 44 Berth 1 Berth 33

Why Cyprus? The strategic positioning The international market & product flows: To serve as a hub in the Eastern Mediterranean to capture the flows of Fuel Oil and high sulfur gasoil from the Black Sea to the East; Middle Distillates from the East to the West; Gasoline from Europe to the East Med, the Red Sea and North Africa; Flows are changing due to new refineries in the Arab Gulf, refinery closures in EU.

MED Fuel oil 1.5-0.3 Med France balance only. Excludes the northern regions 0.4-0.4 3.7 3.5-0.5 1.8-0.6 6.3 (!) We don t have good trade data for Algeria perhaps categorized as semi finished products rather than FO 1.6 1.6 0.3 0.3 *Changes in balances do not take into account potential global switch to 0.5% sulphur bunker fuel in 2020 +3.2 0.5 2.2 +0.3 0.2 1.6-1.3 2.8 3.3 0.9 1.0 1.3-0.6 Deficit Surplus Trade flow Change by 2020 1.7 +0.4

MED Diesel/Gasoil Med longs are expected to shrink, increasing import requirements from East of Suez (Mid East exports refineries in particular) 1.4 Med France balance only. Excludes the northern regions 4.3 1.0 +2.3 1.8 +4.5 4.0 1.3 1.6 +0.7 7.2-6.2 1.3 *Albania, B&H, Croatia, Kosovo, FYROM, Montenegro 1.1 1.6 1.6 1.3 1.4 3.2* -2.6 0.3 5.3-2.7 1.3 5.7** 12.2 2.0 2.6 1.7 **of which 2 from the Red sea Deficit Surplus Trade flow Change by 2020-1.1 +0.4 2.8

*Albania, B&H, Kosovo, FYROM, Montenegro MED Gasoline The region s surplus will decrease and might reduce bulk building opportunities for long haul exports, but intra-med trade will remain robust with structural longs in the North supplying deficit South -0.5 1.7 Med France balance only. Excludes the northern regions 0.4-1.2 4.5-0.4 2.8 1.8 0.6 +0.3-4.4 0.6 6.8 0.4 1.6 0.3 * 2.0 1.6 1.3-0.2 0.6 0.6 3.1 1.0 +0.3 1.7 Deficit Surplus Trade flow Change by 2020 1.1 2.4 1.6-0.6 0.5

Why Cyprus? Ship-to-Ship Ship-to-ship operations in the Eastern Mediterranean Currently 250 trans-shipments per year take place in the open sea around Cyprus. In 2016, 9.6 million metric tons were trans-shipped. This quantity is expected to increase

Why Cyprus? (other than geography) Deep sea water close to shore EU membership (relates to Customs status) Liberal economy & Eurozone Human talent and high academic /professional standard Excellent professional services (e.g. financial, legal, audit/accounting, fiduciary) Entrepreneurial spirit Areas of improvement: Simplification of permits/licenses processes One-stop shop

IMO s bunker fuel sulfur cap (0.5% sulfur content) Winners & Losers European refineries will experience Fuel Oil surplus and Diesel deficit Less regulated competition and modern refineries will take advantage (ME, Asia) Upgrade of refineries to deal with the regulation is limited and slow (mainly Russia) European ports lose (e.g. Rotterdam 13% ) whereas Asia ports gain (e.g. Singapore 6% ) Scrubbers on ships (spraying alkaline water into a ship s exhaust to enable burning of HSFO) cost ca. $5m and time at the shipyard) LNG burning (conversion costly ca. $7m for a Suezmax size of vessel and time at shipyard) Oil storage terminals to blend HSFO with Diesel producing LSFO (0.5%) VTTV phase 2? Ship owners need to form an opinion about the price spread between HSFO and LSFO to decide if an upfront investment on scrubbers or LNG pays off or do nothing in expectation of an oil industry reaction.

Phase II: Additional capacity 300K m 3 Fuel Oil blending (est. 92m)

Investment Opportunity in LNG import infrastructure (est. 17m berth 1 or 27m finger pier) T-602

LNG: On-shore pipeline routing to EAC T-602 Proposed on-shore pipeline routing: 2.2 km