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Vopak takes up energy transition with 'massive' writedowns

Illustration shows a model of 3D printed oil barrels in front of a Vopak logo displayed in Zenica

By Juliette Portala and Dina Kartit

(Reuters) -Vopak sees many opportunities to boost its portfolio in liquefied natural gas (LNG) worldwide as Europe braces for a tighter squeeze in Russian gas supply, the finance chief of the Dutch tank storage group said on Wednesday.

With a dozen European Union countries already facing lower gas supplies, Brussels is urging member states to store gas for winter, against fears that Russia could halt flows in retaliation for sanctions over the Ukraine war.

"A lot of the projects in our portfolio are non-European-based," newly-appointed Chief Financial Officer Michiel Gilsing told Reuters, citing plans to increase the firm's LNG capacity, including in places such as Hong Kong and Australia.

Vopak, which hopes to grow its footprint in new energies and sustainable feedstocks, forecast last month that its share of capital employed in industrial and gas would increase by 2025, while that of oil and chemical gradually falls.

"The energy transition will not happen uniformly," Chief Executive Dick Richelle said on a call.

Gilsing added that, for every investment decision, Vopak needed to look at the lifetime of its assets and consider where the market was and where it could be going forward.

For ING analyst Quirijn Mulder, "new management did not sit on its hands" in the first six months of the year, as it pointed to a "massive" writedown of Europoort and Botlek terminals.

Rotterdam's Europoort is preparing to cut capacity by 2030 and use the available land for new energy investments while Botlek is set to face inflation woes, utility prices and labour cost pressures, Vopak said in a statement.

Mulder said overall asset impairment charges of 468 million euros ($474.51 million) were larger and faster than expected, raising questions about the future of the other 60 terminals, and asked if massive writedowns could now be expected every year.

Vopak's shares were down 0.7% by 0905 GMT.

($1=0.9863 euros)

(Reporting by Juliette Portala and Dina Kartit; Editing by Sherry Jacob-Phillips and Clarence Fernandez)