Oil price crash prompts scramble for Caribbean storage tanks
By Marianna Parraga
HOUSTON, Sept 1 (Reuters) - Demand for crude storage in the Caribbean, one of the world's most important oil hubs, is rising as producers and traders try to ride out the worst price crash in six years by holding onto more barrels or making blends that can be sold for premiums.
The last time tanks in the logistically-important islands were this full, during the price collapse of 2009, companies started leasing vessels to use as floating storage.
That is not yet happening now, but the only way to get tank space at the moment is to sublease it, said one tank broker with decades of experience.
Since June, his firm alone has received requests to lease up to 7.5 million barrels of tankage in a region with some 100 million barrels of capacity. That is much more than in previous months, though no official statistics are available.
Others signs also point to a shortage of tanks. Midstream players Buckeye Partners LP and NuStar Energy LP say they have basically run out of space. And some producers with terminals in the zone say now is a good time to put barrels into tanks and wait for U.S. crude prices to rise from $40-a-barrel doldrums.
"All tanks are subscribed," said the storage broker. Things have not looked this tight in six years.
Crude inventories have been building up in recent months in most terminals, leaving limited space for subleasing, which could imply higher rents, he said.
"We are at 100 percent capacity", said a spokesman from NuStar Energy, referring to bookings at the company's terminal in St. Eustatius, with tankage for 13 million barrels. Continuación...