The UAE-based Gulf Petrochem plans to expand its oil storage capacity in Fujairah after starting up its first oil terminal in the east-coast emirate.

The $130m facility has a capacity of 412,000 cubic metres to store oil products such as fuel oil, gas oil and cutter stock at the Port of Fujairah.

Once the terminal is stabilised, Gulf Petrochem plans to start on a second phase project to expand the terminal’s capacity, group chief executive Sanjeev Sisaudia said on the sidelines of the terminal’s opening ceremony.

The scope has not yet been finalised, but Gulf Petrochem is targeting a total capacity of 1.2 million cubic metres, which could be achieved during the second phase. The project is estimated to take 20-24 months, with completion expected in late 2015.

The new terminal contains 17 storage tanks with sizes ranging from 13,000 cubic metres up to 40,000 cubic metres, connecting to the port’s common matrix manifold for handling various vessels.

Gulf Petrochem handled the engineering, procurement and construction (EPC) phase of the project in house, financially backed by strategic partners National Bank of Fujairah and First Gulf Bank. The project management consultancy (PMC) was handled by UK-based Mott MacDonald.

The project significantly expands Gulf Petrochem’s existing storage capabilities. The company also has the capacity to store 35,000 cubic metres at its refinery site in Hamriyah Freezone, Sharjah.

Fujairah has seen a major increase in investment in oil storage projects in recent years, with an estimated $500m forecast to be spent on EPC contracts in 2012-13 alone. Capacity is expected to hit more than 10 million cubic metres by the end of 2014, compared with about 3 million cubic metres in 2011.