(Updates swap prices; adds comments)
SINGAPORE, July 29 (Reuters) - Singapore Jurong Port Tank Terminal’s (JPTT) petroleum and petrochemical storage facility in Jurong Island has been fully leased, with China’s PetroChina taking up all of its phase 1 capacity, JPTT said on Monday.
JPTT’s phase 1, which comprises 252,000 cubic metres of clean storage and petrochemicals capacity, started partial operations on April 1 this year.
PetroChina officials weren’t immediately available for comment.
The terminal, which has so far received, blended and discharged more than 1 million tonnes of products, is expected to handle about 7 million tonnes of clean petroleum products a year.
“The majority of the existing tanks are used for gasoline storage with the balance used for chemical components for the blending of gasoline,” JPTT chief executive Ooi Boon Hoe said in a statement.
“When fully operational, the terminal will boast approximately 550,000 cubic metres of storage capacity.”
Ooi said JPTT and its partners were in “deep discussions” on phase 2 of the terminal and that phase 2 will not be ready by January 2020.
“It will take us about 18 months to get it sorted out. The market is not particularly strong at the moment for tank storage,” he said, adding however there were signs of recovery.
Although the structure for middle distillates is slightly backwardated, he added the backwardation is narrower further ahead, a sign which indicates that demand for storage will become stronger later.
A backwardated market structure, where front-month prices are higher than following months, reflects firm near-term demand and traders would prefer to sell fuel rather than store it.
But a market in contango, which refers to front-month prices being lower than the following month, would encourage traders to store instead of to sell petroleum products.
The August front-month swap price for diesel on July 29, for instance, was 40 cents higher than the price in September. (Reporting by Seng Li Peng and Jessica Jaganathan; editing by Kenneth Maxwell, Richard Pullin and David Evans)