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Tue 7 Jul 2009, 07:22 GMT

Mercuria: Singapore supply speculation mounts


Energy trader is reported to have leased a VLCC for storing and blending fuel oil.

Geneva-based trading firm Mercuria Energy is said to be considering selling marine fuel in Singapore following reports that it has leased a supertanker in southern Malaysian waters.

The company is understood to have recently entered into a lease agreement to use a VLCC to use as floating storage, joining a slew of companies venturing into the residual fuels market to capitalise on potentially firm trade margins.

The tanker is also reportedly able to blend fuel oil to meet marine fuel specifications, prompting speculation that it is mulling selling bunker fuel in Singapore, the world's largest bunker port.

Last month Mercuria borrowed $685 million via an oversubscribed one-year revolving credit facility to help finance its rapid expansion in the energy markets.

According to Chief Executive and co-founder Marco Dunand, the company managed a turnover of around $47 billion last year and plans to achieve a volume growth of between 20-25 percent per year over the next few years.

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.

Malaysia  Singapore  Singapore (SG) 
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