Dubai Multi Commodities Center Trading Hub Plans LNG and Oil Storage Facilities and Promotes Steel Industry
Dubai Multi Commodities Center (DMCC) (Dubai, United Arab Emirates), a state-owned enterprise, has unveiled plans to promote Dubai as the destination for commodity exchange. According to a report by Industrial Info Resources (Sugar Land, TX), the objective of DMCC, which was established in 2002, is to increase commodity trading and provide impetus to regional trade and industries. The center aims to develop a full fledged market place in Dubai for global customers and create an environment that is conducive for business and commerce by providing infrastructure and market information. DMCC already has over 1,300 registered members.
DMCC has recently announced some key projects that will make Dubai the center of oil and gas trading. DMCC and LNG IMPEL Incorporated (London, United Kingdom), a subsidiary of Galveston LNG Incorporated (Calgary, Alberta), have agreed to set up a $2 billion liquefied natural gas (LNG) storage facility. During the first phase, LNG storage tanks with a capacity of 200,000 cubic meters each will be built. This phase is expected to be complete by 2011. DMCC is looking out for equity partners for this venture. The tanks are planned in a location which will circumvent the Strait of Hormuz. The Strait of Hormuz is a key link for Dubai to its customers but is located in a sensitive position and could be disrupted if trouble erupts between the United States and Iran.
Dubai hopes to have storage locations on the east coast of the United Arab Emirates, which will provide an alternate shipping route if the Strait of Hormuz is blocked. Dubai was the first choice of location for this facility. Other locations under consideration were Oman and Fujairah. Because of steep land costs in the other two locations, Fujairah may be the final choice for this facility. The long-term objective of this venture is to build a first-of-its-kind storage facility that can hold 1.12 billion to 1.82 billion cubic meters of LNG. Quality blending and LNG loans will also be offered later. An oil pipeline is also planned that will carry 1.6 million barrels per day of crude oil to the Fujairah storage hub. This pipeline will also bypass the current shipping route.
DMCC is also building an oil-storage facility to deliver fuel to the new Jebel Ali Airport in United Arab Emirates. The capacity of this facility, based in Techno Park Free Zone in Dubai, will be 570,000 cubic meters. DMCC will be partnered by Tropicana Trading (Dubai) and Star Energy Resources Limited (Dubai) in this venture. The facility will provide storage for fuel oil, gasoline and jet fuel. Two berths for tankers up to 80,000 tons will also be built at the airport. The Front-End Engineering and Design (FEED) process is in progress.
Recently, DMCC established the Steel Club, an association to develop and strengthen the steel industry in United Arab Emirates. The club aims to open new avenues for business, identify potential buyers and sellers, and exchange global industry best practices. It will bring together key industry players, shipping representatives, buyers, brokers and other strategic stakeholders to work toward establishing a transparent industry environment while increasing trade and commerce. The club will also create awareness about various risk-management and financial tools. The Steel Club will eventually help in educating, networking and promote the recognition of the steel industry in the country.
DMCC is also partnering with Eco Securities Group plc (LSE:ECO) (Dublin, Ireland), a world leader in developing and trading carbon credits, to make Dubai a regional hub for greenhouse-gas emission reduction. The agreement will reinforce Dubai's commitment to developing technologies that are cleaner and projects that adhere to the Kyoto Protocol's Clean Development Mechanism (CDM). This venture will be headquartered in Dubai and will work with both public and private sector companies to identify projects that are CDM-compliant and help reduce greenhouse gas emissions.
DMCC recently received a credit rating of "A" for long-term and "A-1" short-term for foreign and local currency from Standard and Poor's (New York).
