Vopak expects clean energy investments to accelerate towards 2030, CEO says

Koninklijke Vopak NV

01/11/2024 24:00

* 
      Spent less than $100 mln of the $1 bln pledged to invest
by 2030
    

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      Projects slowed by lack of government mandates, higher
costs
    

        * 
      Aims to capture bigger share of biofuels market
    

  
    By Florence Tan and Jeslyn Lerh
       SINGAPORE, Nov 1 (Reuters) - Global tank storage
operator Vopak  VOPA.AS  has committed just a fraction of the $1
billion it allocated for energy transition projects by 2030 but
expects investments to accelerate towards the end of the decade,
CEO Dick Richelle said. 
    The company has spent a little less than $100 million on the
projects in the two years since it made the spending pledge,
Richelle told Reuters in an interview.
    "Although developments have slowed down, we still see that
it kind of moved away from a big hype and dream to much more
realism in building these new supply chains going forward," he
said.
    Some of the factors that have slowed projects include a lack
of government mandates and incentives, higher production costs
for alternative fuels and rising construction capital
expenditure, he added.
    For example, Norway's Equinor  EQNR.OL  scrapped plans to
export hydrogen to Germany because it is too expensive and there
is insufficient demand and Repsol  REP.MC  put on hold hydrogen
projects in Spain due to an unfavourable regulatory environment.
    "You need all of those parties at the same time to hold
hands and basically jump to make sure that you can establish a
whole supply chain," Richelle said.
    "I think that has been slow simply because of the fact that
it's either not clear what incentive you're going to get at
production, or it's not clear what the mandate is and where you
want to sell your product, or the incentive over there in order
to import the product."
    Looking ahead, Vopak is focusing on infrastructure projects
in four areas of energy transition: biofuels and feedstocks such
as sustainable aviation fuel and renewable diesel; hydrogen and
hydrogen carriers such as ammonia; carbon dioxide (CO2) value
and supply chains; and battery storage. 
    Vopak plans to capture a bigger share of the biofuels market
by converting existing storage tanks for bio-bunker fuel
blending in Rotterdam and Singapore, and in the use of biofuels
as raw material for fuel and petrochemical production in India,
Brazil and Los Angeles, Richelle said.
    For ammonia, Vopak is targeting big production centres such
as the Middle East and the U.S., and end-markets like Antwerp,
Rotterdam, Singapore and South Korea where it operates
terminals, he added. The company said in July it had opened an
office in Japan to explore opportunities there.
    Vopak also has a strong presence in China, a competitive
producer of green methanol, where it can facilitate the
production and distribution of the alternative fuel, Richelle
said.
    In carbon storage, the company is working on a project in
Rotterdam and has an initial agreement with Australia's Northern
Territory to develop a CO2 import terminal.
    Vopak is also making early steps in battery storage
investments, having announced a project in Texas earlier this
year, Richelle said.
    "We see that there's potentially an important role for Vopak
to play as the world moves from the storage of molecules to
electrons," he said.

 (Reporting by Florence Tan and Jeslyn Lerh; Editing by Jamie
Freed)
 ((mailto:Florence.Tan@thomsonreuters.com; Reuters Messaging:
rm://florence.tan.thomsonreuters.com@reuters.net/))