EP governor launches first Saudi cargo village

Updated 07 April 2015
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EP governor launches first Saudi cargo village

King Fahd International Airport (KFIA), one of the region’s fastest growing and leading international airports, Tuesday unveiled its cargo village.
The launch event was presided over by Eastern Province Gov. Prince Saud bin Naif, in the presence of Sulaiman Abdullah Al-Hamdan, president of the General Authority for Civil Aviation (GACA), royal family members, top executives of several public departments and the top management of KFIA.
The cargo village is spread over half a million square meters. More than 70 percent of goods bound for the Gulf region are destined for the Kingdom, and by facilitating operations the cargo village positions KFIA as a multi-modal shipment and clearance destination, directly serving the Eastern Province and the Kingdom.
The new facility offers direct access to Saudi Arabia and bypasses the need for cargo to transship through neighboring countries.
Al-Hamdan said: "We are delighted by the launch of the first cargo village in the Kingdom, and we believe that it will play a vital role in supporting the Saudi economy. KFIA’s cargo village offers ease of shipping and cargo services while serving as a regional hub for global companies. Most importantly, the cargo village creates new economic and employment opportunities for the Eastern Province.”
For the planning and implementation of the cargo cillage, KFIA has worked in cooperation with Saudi Customs and Changi Airports International (CAI).
The cargo village has been designed to the latest international standards and has been customized to maximize convenience for airlines and freight companies operating from KFIA. The cargo village guarantees express cargo delivery with reduced shipping times and increases cargo capacity, promising operating efficiencies for freight companies.
KFIA Director-General Yousef Al-Dhahri said: “King Fahd International Airport is proud to present to Dammam, the Kingdom and the region this dynamic facility revolutionizing the way cargo is handled in the region. With our continued partnership with Changi Airports International and their efforts, we are on track to becoming one of the region’s leading aviation hubs serving both passenger and cargo traffic. We anticipate that we will soon be starting the next phase as the demand for facilities is expected to grow strongly.”
CAI CEO Lim Liang Song lauded the close working partnership among CAI, KFIA and Saudi Customs. He said: “We are proud to be part of this partnership in bringing this innovative facility to Dammam. The cargo village will provide greater connectivity and cost efficiencies, and enhance KFIA’s position as a key regional cargo hub on the Eastern seaboard of the Kingdom.”
The two-year construction commenced in December 2012 and is now fully operational. The first of its kind for multimodal facilities in the Kingdom, the cargo village has attracted leading international and regional freight companies, such as DHL Express, NAQEL, SMSA Express, TNT and UPS, to establish express cargo clearance facilities and offices at the King Fahd Cargo Village.


Asia’s refining profits slump as Mideast exports surge

Updated 23 February 2019
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Asia’s refining profits slump as Mideast exports surge

  • Since 2006, the Asia-Pacific has been the world’s biggest oil-consuming region, led by industrial users South Korea and Japan along with rising powerhouses China and India
  • However, overbuilding of refineries and sluggish demand growth have caused a jump in fuel exports from these demand hubs

SINGAPORE: Asia’s biggest oil consumers are flooding the region with fuel as refining output is exceeding consumption amid a slowdown in demand growth, pressuring industry profits.
Since 2006, the Asia-Pacific has been the world’s biggest oil-consuming region, led by industrial users South Korea and Japan along with rising powerhouses China and India.
Yet overbuilding of refineries and sluggish demand growth have caused a jump in fuel exports from these demand hubs.
Compounding the supply overhang, fuel exports from the Middle East, which BP data shows added more than 1 million barrels per day (bpd) of refining capacity from 2013 to 2017, have doubled since 2014 to around 55 million tons, according to Refinitiv.
Car sales in China, the world’s second-biggest oil user, fell for the first time on record last year, and early 2019 sales also remain weak, suggesting a slowdown in gasoline demand.
For diesel, China National Petroleum Corp. in January said that it expected demand to fall by 1.1 percent in 2019. That would be China’s first annual demand decline for a major fuel since its industrial ascent started in 1990.
The surge in fuel exports combined with a 25 percent jump in crude oil prices so far this year has collapsed Singapore refinery margins, the Asian benchmark, from more than $11 per barrel in mid-2017 to just over $2.
Combine the slumping margins with labor costs and taxes and many Asian refineries now struggle to make money.
The squeezed margins have pummelled the stocks of most major Asian petroleum companies, such as Japan’s refiners JXTG Holdings Inc. or Idemitsu Kosan, South Korea’s top oil processor SK Innovation, Asia’s top oil refiner China Petroleum & Chemical Corp. and Indian Oil Corp., with some companies dropping by about 40 percent over the past year. Jeff Brown, president of energy consultancy FGE, said the surge in exports and resulting oversupply were a “big problem” for the industry.
“The pressure on refinery margins is a case of death by a thousand cuts ... Refinery upgrades throughout the region are bumping up against softening demand growth,” he said.
The profit slump follows a surge in fuel exports from China, India, Japan, South Korea and Taiwan. Refinitiv shipping data shows fuel exports from those countries have risen threefold since 2014, to a record of around 15 million tons in January.
The biggest jump in exports has come from China, where refiners are selling off record amounts of excess fuel into Asia.
“There is a risk for Asian market turmoil if (China’s fuel) export capacity remains at the current level or grows further,” said Noriaki Sakai, chief executive officer at Idemitsu Kosan during a news conference last week.
But Japanese and South Korean fuel exports have also risen as demand at home falls amid mature industry and a shrinking population. Japan’s 2019 oil demand will drop by 0.1 percent from 2018, while South Korea’s will remain flat, according to forecasts from Energy Aspects.
In Japan, oil imports have been falling steadily for years, yet its refiners produce more fuel than its industry can absorb. The situation is similar in South Korea, the world’s fifth-biggest refiner by capacity, according to data from BP.
Cho Sang-bum, an official at the Korea Petroleum Association, which represents South Korean refiners, said the surging exports had “triggered a gasoline glut.”
That glut caused negative gasoline margins in January.