Oman Tank Terminal Company (OTTCO) plans to start operating a floating storage facility later this year to help to boost trading in crude oil futures on the Dubai Mercantile Exchange (DME), trade sources said on Tuesday.
The storage will help to increase monthly trade volumes on the DME by two million barrels and also help to curb price volatility, they said.
The storage will make more oil available that can be delivered against the futures contracts.
OTTCO, majority owned by the Oman Oil Company (OOC), will lease storage space on board a Very Large Crude Carrier, via a tender process to four companies for a year, they said. Each company will have space to store one cargo, or 500,000 barrels.
The tender could be issued in June or July so that the storage space would be allocated before September when trade in November-loading cargoes starts, the sources said.
OTTCO, a joint venture between OOC and Takamul Investment Company, said it had received feedback from traders on the possible floating storage solution and the project was still a work in progress.