Oiltanking lifts capacity in Singapore storage

16 October 2012

Martin Quinlan, LONDON: Germany’s Oiltanking is to buy the Helios oil storage terminal on Jurong island, Singapore, from Chemoil. The acquisition will increase Oiltanking’s petroleum capacity in the booming Singapore storage business by 37%, although it will still be number-two in the port to Vopak.

Oiltanking will pay $285 million for the Helios terminal, which – having started-up in 2008 – is one of Singapore’s newer facilities. The terminal has a capacity of 503,000 cubic metres (cm), and was purpose-designed for the storage and blending of fuel oil. Its six-berth jetty can handle tankers of Suezmax size, with two mooring at the same time.

Chemoil, a marine fuels supplier, is to continue to operate its bunkering business from the Helios terminal by leasing capacity in the facility – which is also used by other fuel oil traders, including Itochu, Brightoil and Petrobras. When opening the terminal Chemoil said its operations would benefit from having control of the supply-chain, but it now says structural changes in the marine fuels market will "favour an asset-light business model that is more able to respond quickly to volatility in volumes and margins".

The Helios terminal was built when Chemoil was headed Robert Chandran, who founded the company in 1981. Chandran died in 2008 following a helicopter accident, after which the company – controlled by members of his family – saw changes of course. But in 2010 the family interests were sold to trading company Glencore, which now holds 89%.

The purchase of Helios will lift Oiltanking’s petroleum capacity in Singapore to 1.87 million cm – the company’s main terminal on Jurong has a capacity of 1.37 million cm, and it also has a chemicals terminal. Vopak has 2.52 million cm of petroleum capacity in terminals at Banyan and Sebarok, and also two chemicals terminals.

Demand for storage capacity in Singapore has been increasing for many years, driven in part by China’s growing imports, and fees have strengthened accordingly (PE Winter/11, p30). With no land available for new terminals, several bunker suppliers are using moored tankers and storage capacity is also being constructed nearby in Johor, Malaysia – but capacity in Singapore’s land-based facilities attracts a premium.

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