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China's Southernpec has increased its floating storage capacity in South East Asia with the addition of a new vessel in Malaysia, Reuters reports.

The Southernpec 5, a single-hull Very Large Crude Carrier (VLCC), is reported to have been purchased from an unnamed Greek shipowner for approximately $14 million.

The vessel is currently located in Singapore and is expected to be anchored off southern Malaysia's Tanjung Pelepas port by the end of this month.

Guangzhou-based Southernpec is currently understood to be selling around 200,00 tonnes of product per month, the majority of which is bunker fuel sold on an ex-wharf and delivered basis and larger fuel oil cargo lots to local suppliers.

With the addition of the Southernpec 5, the company's monthly volumes could increase by between 100,000 and 150,000 tonnes per month, according to market estimates.

The company is also understood to be looking to use the additional storage capacity to deliver fuel oil to China, where demand is likely to remain high despite the recent decision to raise the import tariff on fuel oil to 3 percent.

Half of the vessel may also be leased to other traders for storage, according to market reports.

With the acquisition of a second tanker in the region, Southernpec is following in the footsteps of two other Chinese firms - Brightoil Petroleum and Petrochina - that have increased their activity in the marine fuels market in order to raise sales volumes.

Last year Petrochina acquired Keppel Oil and Gas Services Pte Ltd's stake in Singapore Petroleum Company Limited (SPC). SPC has a 50 percent interest in Singapore Refining Company Private Limited, one of the three major petroleum refiners in Singapore. SPC also conducts terminalling and distribution and trading of crude and refined petroleum products.

This month Petrochina also reached an agreement with Nustar Energy, to lease 5 million barrels of oil storage capacity from its 13 million barrel Statia Terminal on the island of St. Eustatius. The oil firm is also understood to have agreed to lease 400,000 barrels of fuel oil storage in Los Angeles from Nustar.

Meanwile, Brightoil Petroleum announced earlier this month that it has taken delivery of its first ocean-going oil tanker in Singapore.

The double-hulled aframax oil tanker, which was purchased in November 2009 for US$52.5million, has a capacity of 107,500 DWT and an overall length of 243.8m. The vessel will mainly be used for transporting fuel oil or crude oil internationally and will be chartered out to generate additional revenue.