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Vitol subsidiary VTTI has fully leased the second phase of its ATT Tanjung Bin Sdn Bhd (ATB) oil terminal in Tanjung Pelepas, located in south-west Johor, Malaysia, Reuters reports.

Phase two of the ATB terminal was completed in August 2015, adding a further 260,000 cubic metres (cbm) of storage to the initial capacity of 893,000 cbm.

Industry sources informed Reuters that commodity trading firm Koch Supply and Trading and Malaysia's Petronas had each reached an agreement to lease half of the recently added storage. However, neither Petronas nor Koch have so far publicly confirmed the validity of the news.

VTTI's Tanjung Bin terminal opened in 2012 with an initial storage capacity of 893,000 cbm, which is also fully leased. The first phase is used to store fuel oil, gasoline and middle distillates, while its jetty can accommodate a partly laden very large crude carrier (VLCC) or a fully laden Suezmax vessel.

As well as the construction of 260,000 cbm of tank storage - bringing the total capacity to 1,153,000 cbm - phase two of the Tanjung Bin terminal also added a jetty that can accommodate Aframax vessels with a capacity of 120,000 deadweight tonnes (dwt).

Tanjung Pelepas is located approximately 50 kilometres from Singapore - the world's leading bunker port. Reports that both Koch and Petronas have leased a combined total of 260,000 cbm of storage at the southern Malaysia port, comes during a period of high fuel oil inventory levels in Singapore.

International Enterprise Singapore - an agency operating under the Ministry of Trade and Industry - said that onshore fuel oil stocks in Singapore were at a record high of nearly 30 million barrels during the seven days up to Wednesday, September 16.

In addition to the record inventory levels, cheaper freight rates and a strong contango - where prices for loading cargoes are higher in the future in comparison with the current month - have prompted traders to take advantage of current market conditions in order to store fuel oil on tankers and available land-based storage sites.