Chinese bunker supplier
Brightoil Petroleum is reportedly on the lookout for onshore storage tanks as it gets ready to begin supplying marine fuel in Singapore before the end of the year,
Reuters reports.
Hong Kong-listed Brightoil received approval in May from the
Maritime and Port Authority of Singapore (MPA) to begin operating as an accredited supplier bunker fuel at the world's leading bunker port, subject to the company meeting specific conditions, which included the use of double-hulled bunker tankers.
In a conversation with
Reuters, Brightoil Executive Director William Chia, is reported to have said that the company plans to start its operations in Singapore during the third or fourth quarter.
Brightoil is understood to have already secured a short-term solution to its quest for storage space through a deal with
Universal Terminal to store and blend up to 80,000 cubic metres (m3) of its fuel oil cargoes there.
The 14.25 million barrel-capacity facility is operated by Singapore fuel oil trader
Hin Leong in a joint venture with China's
PetroChina. The Brightoil deal with Universal Terminal was expected to commence during the July-August period, sources said.
Brightoil joins a slew of companies venturing into the residual fuels market to capitalise on potentially firm trade margins.
Earlier this month, Geneva-based trading firm
Mercuria Energy was said to be considering selling marine fuel in Singapore following reports that it has leased a supertanker in southern Malaysian waters. In June the company borrowed $685 million via an oversubscribed one-year revolving credit facility to help finance its rapid expansion in the energy markets.
Also in July, commodity trading firm
Noble Group was said to be still looking to lease a supertanker for at least two years to use as fuel oil storage. The company began its fuel oil business in April after reportedly hiring former Trafigura traders who left the global trading house over the past 12 months.
Other companies to have also recently entered the fuel oil market include Asian trading firm
Strong Petroleum, Japan's
Itochu Petroleum and China-based
Southern Petrochemical Co Ltd..
Last month, Southern Petrochemical Co. was said to have acquired a supertanker to use as floating storage to trade high sulphur fuel oil (HSFO) in Singapore.
The
Nan Fang 3, a very large crude carrier (VLCC), arrived in Singapore in June and is positioned at Hin Leong's anchorage. The tanker is able to blend fuel oil to meet marine fuel specifications.
Strong has also leased a VLCC, whilst Itochu recently sealed a deal to lease 150,000 cubic metres of storage at Chemoil's Helios Terminal on Jurong Island, Singapore.
Meanwhile, Guangzhou-based
Southernpec paid around $15 million for a 284,000-tonne supertanker to store fuel oil. The tanker is already anchored off southern Malaysia's Tanjung Pelepas port and the company is due to start supplying bunker fuel in Singapore from next month, according to market sources.
Brightoil already supplies marine fuel to three ports in southern China and began delivering bunkers to clients in Shanghai earlier this month. The move prompted rival
China Marine Bunker Supply Co. to cancel its policy of publising posted prices for China's leading bunker port.
Brightoil is reported to have sold 824,000 tonnes of marine fuel during the last six months of 2008. The company also intends to expand its current network to cover most of China's ports by the end of this year and to begin supplying in Rotterdam and the U.S West Coast in the near future.