Chemoil to supply in Chennai in '09

MD says company expects to start supplying in India's southeast coast by the end of the year.

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Updated on 04 Jun 2009 17:12 GMT

Leading marine fuel supplier Chemoil has revealed its plans for expansion in India, which includes the company's intention to begin supplying in the southeastern port of Chennai by the end of the year.

Speaking at the Reuters Energy Summit, Sanjay Anand [pictured], Managing Director of Asia and Middle East operations, said "We are discussing with various parties about our expansion into Chennai, and we expect to start supplying 10,000 tons of bunker fuel by the end of the year."

The company also intends to begin supplying marine fuel in Mumbai by 2010, Reuters said.

Chemoil launched its joint venture supply service with local firm Adani Enterprises Limited at the start of this year and was reported to have recorded 'encouraging sales' and growing demand within its first three months of business.

Monthly sales volumes at Mundra Port reached 50,000 metric tonnes in both March and April 2009 and the company expects sales to double to around 100,000 tonnes per month by the end of this year, Anand said.

Mundra Port already has a sizeable share of the country's bunker market, which is estimated to be between 1-1.5 million tonnes per year in total. Anand said the Gulf of Kutch, which includes Mundra, accounts for over 22 percent of maritime cargo traffic in India and that he expects this to exceed 30 percent by 2011-2012.

Fuel deliveries at Mundra Port, India's largest bunkering hub, are made via pipelines to 12 berths, while a combination of owned and chartered barges are used to deliver to other ports in the Gujarat region.

Anand said the company was planning to acquire new ships by the end of the year, or by 2010, depending on market conditions. His comments follow those made by Chemoil in May, when it confirmed plans to extend its supply service to larger vessels in the Gulf of Kutch and the nearby Gujurat ports as part of its market expansion strategy.

In order to achieve its sales targets, Chemoil is also modifying its storage tanks to blend fuels to meet the specification needs of vessels calling at Mundra.

The Adani Group owns and operates the joint venture’s supply infrastructure at Mundra Port. Storage terminal facilities with aggregated capacity of 90,000 cubic meters (cbm) that are leased from the Mundra Port Special Economic Zone are available for fuel products storage. The storage capacity of the terminal can be increased to 120,000 cbm as market demand dictates.