February 17, 2013 saw the start of a project that would change the way some people did business in Fujairah. IL&FS Maritime Infrastructure Company Limited (IMICL), through its special purpose vehicle IL&FS Prime Terminals FZC (IPTF), began the development of an integrated tank terminal at Fujairah in the United Arab Emirates. Phase 1 of the project was completed on January 15, 2015. As of mid-July 2015, IPTF already has one of the biggest oil companies in the world bringing their business to them, as well as a host of other companies bunkering here to avail of the unique service, quality, infrastructure and skill that this terminal brings to the field.

Land topography
To understand how the terminal was set up in Fujairah, one must first understand the layout of the land. Land is a premium in Fujairah. It is also not one of the better-known emirates of the UAE. It sports a harsh geography of mountains and hard rock and lies outside the Arabian Gulf. The ocean has been reclaimed a bit, but due to much of the land still being mountainous, there is very limited land available for construction and development. Given all of this, Fujairah has still built silos for grain storage, it is a bunkering hub, and a lot of onshore terminals have come up here.

Saibal De,
Director & CEO,
IL&FS Maritime Infrastructure Company Limited.

“Successful commissioning and inhouse operations thereafter, is another example of IL&FS’s diligence towards implementing infrastructure project across sectors in partnership with and support from Government.”


Market study
A study of the markets confirmed Fujairah as the ideal place to build a tank terminal. Fujairah exists in a very central location that caters to different streams. Initial analysis proved that there was a lot of demand in this area due to a lot of supply from surrounding countries. There is crude oil coming out of these places and refineries then needing to turn them into certain products.

The second major thing that the study revealed is that traders themselves own a majority of the terminals in Fujairah. This has led to an inherent apprehension by other traders about storing their products in such terminals. IL&FS saw this as an opportunity to step in as a merchant facility not aligned to any of the traders already present.

Another crucial plus point for a tank terminal in Fujairah is of course Iran. If the country does open up, a lot of product will need to come out of Iran, as their infrastructure is limited. That will bring a lot of product to Fujairah, especially for the purpose of smaller cargoes that can be made into bulk by IPTF and send to other regions of the world.


The process toward setting up the terminal from start to finish for Phase 1 took nearly 23 months. The main challenge lay in the fact that this was a completely new field for the IL&FS Group and a first in terms of a project of this magnitude outside India. The environment was brand new. Permissions were sought. Approvals had to be got. Experts brought in. The land had to be moulded according to the infrastructure needed. The port had to be managed. It took time to get a foothold into the eco system of Fujairah. It wasn’t all smooth sailing. But it was worth every hiccup, hurdle, and paved path. It may have taken a bit more time than envisaged.

Shaping the land
Once the finance was in place, the eco system understood better, and contractors brought on board, the land parcel itself was the next challenge. The site was surrounded by mountains on three sides. These mountains had to be blasted off, and the slopes stabilized; all of which needed approvals, which took time. Given the geography of the land, one couldn’t forget the wadis or natural waterfalls that exist. Due to the heavy rains in Fujairah, the site experienced water logging and the process of managing the waterfalls and the storm water drains posed a challenging aspect. Another problem that cropped up, setting the project back by about 3 months, was the utility lines that were punctured at a road crossing due to incorrect designs made available to the project managers.

Under construction
One needs to bear in mind that Fujairah doesn’t have its own resources. All its investments and funding comes from Dubai, and primarily Abu Dhabi. The terminal itself is linked through a network and a 200 km long pipeline, made to specifically pump crude directly to the port of Fujairah, so that the gulf itself is completely avoided. The port was in the process of creating a special manifold where IPTF could plug in and has two connection points; one in the north and one in the south. The south one is the operational one, where everyone was plugged in at that time.

When IL&FS started the project, connectivity on the south side wasn’t possible due to so many companies using the south manifold. IPTF thus was shifted to the northern side, which was yet to be constructed. This created a lot of apprehension in terms of meeting the deadline and being fully operational for business. IPTF was the first to be plugged into the northern manifold. The distance from this manifold to the terminal is about 1.5 kms! This led to a spate of discussions, as the port authorities of Fujairah were still in the developing and design phase of the north side, vis-à-vis IPTF, which was already under construction. Any change on their side, created a huge impact on the terminal, the land size, valves, safety valves, etc.

So, once construction took off, the road to completion became shorter.

Making it work
Once different scenarios played out, things were set in motion, and the terminal was built. But no one had any idea yet how to actually operate or run a terminal. The infrastructure in place was top notch but a few items needed to run the terminal weren’t in place yet. First, Daan Schutte, director, marketing & sales, was brought in and then an A-team was put together. Customers pay a lot of money and what they care about most is that the products they bring in are treated with care and any headache is taken away from them. This heavy burden can be shouldered by a good operations manager. That person was found in Rajesh Menon, known in the market for his handling of these kind of terminals. Then, the highest standards of safety, measurements in safety, safety in operations, and a safety manager were put in place. Customer service also had to be set up, so that no customer finds it difficult to communicate with IPTF about their products. Then came the commissioning part, which passes through the Civil Defence Authority and Ministry of Home Affairs. IPTF passed at one go and with this certificate in hand, the next step was to get in customers.

Roping in customers
The first challenge was to find customers who were willing to bring their products into a new terminal, as most would rather wait till someone else has tried it first. IPTF was very lucky to find a trader who was connected to the Fujairah government and was willing to be the first. IPTF started including short-term contracts on a monthly basis and then began inviting big companies on board. There was a procedure to all this. Audits followed. Things were checked. In the end, IPTF got a report that stated that the terminal has passed with flying colours.

Amit Datta,
Chief Executive Officer, IL&FS Prime Terminal Services.



Despite the current oil market not being a very favourable one due to a lot of volatility and therefore a lot of apprehension and weak sentiments, IPTF has done very well for itself. From day one, the terminal
has been at about 70% – 73% occupancy and as of July 15, 2015, two months into commissioning, the terminal has sold 100% of its capacity and are now 100% full, with some long-term contracts and have even had to turn away customers. IPTF now has one major oil company, i.e. BP, on a long-term contract. Bigger companies want to do business here as well. The terminal has managed to deliver consistently and push itself to the top of the list in Fujairah.

Form & function
IPTF is not just a storage terminal. From circulation to blending and heating, these activities are also carried out here. What the terminal allows for is to make bulk. This basically means that companies can bring in smaller cargoes to the facilities and then take out a bigger or larger cargo to wherever they are headed, be it Asia or Europe. In simple terms - small parcels in, big parcels out.

At IPTF, the product can also be blended on site, as the terminal is very well equipped to take in small parcels of gasoline or gas oil and change the properties to the specs of the required region and then distribute and ship it out to that country to supply to other markets, power plants, etc. In this way, companies can manage their parcel sizes the way they want to do and carry multiple parcel sizes.

The sizing of the tanks at IPTF is another big advantage. There are two small tanks between 40,000-20,000 cubits, which is an ideal size for the parcels, which are being shipped in these regions. Companies make payment on complete tanks and not on volume. In an area like Fujairah, a lot of the parcel sizes are small and customers are paying a premium and are not being able to utilize it. The tanks at IPTF are great for people who want to do quick turnarounds.

Green Terminal
In terms of differentiation of IPTF as a terminal, it is being called a green terminal and is the only one in Fujairah. The terminal has also started harnessing solar power for internal usage. There are further plans of turning the whole facility into a green one once Phase 2 begins. This allows for a minimization of the terminal’s carbon footprint and customers are also more eager and likely to store their products here.

Moving forward
Behind the plot of Phase 1, which was 6.2 hectares of land, there is a similar rectangular block of 4.2 hectares, which is currently vacant and likely to go into operation soon. This is Phase 2, which will involve increasing of storage capacity from 0.3 million cubits to 0.7 million cubits.
IMICL has developed great relations with the government of Fujairah, which is in fact a 10% shareholder in the current project. IMICL is thus looking into and investigating openings with other land parcels with strategic investors, who have a specific requirement.

One of the strategic reasons why IMICL went to set up in Fujairah is because of the North & East African markets. There would be a capacity building required over there as well and these are the prospects IMICL are looking at going forward.


Daan Schutte
Director, IL&FS Prime Terminal Fujairah (IPTF).

“Making a good first impression in a new market is essential for the way you are perceived as a company for years to come and IL&FS Terminals, as a team, managed to put our name up there with the best of the class in our industry.”


IPTF, as of now, is one of the smallest or lowest among the terminals at Fujairah, size-wise. But as far as infrastructure, skill set, the amount of time, and bottom line is concerned, it is ranked as one of the fastest in Fujairah. Within 5 months of operation, the terminal is running its operations at full capacity and is moving 1.5 million cubits of cargo. So, every month, the terminal has a full turnaround. This is definitely significant by any standards.

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