Dutch trading company, Trafigura, will lease up to 100,000cm of new clean oil storage capacity in Singapore.
With this lease, under the Horizon Terminal project on Jurong Island, due for operations by Q4 2008, the trader will have an aggregate capacity of 400,000-500,000cm in Asia, mainly for petroleum and middle distillates.
'Trafigura intends to expand its market share. The company is already at number two without the extra capacity now,' a Singapore-based petroleum trader says.
Traders expect Trafigura's expansion to focus on the Asian petroleum market, given its global reach and ability to arbitrage cargoes to the West, particularly during the US driving season.
Most of Trafigura's capacity at the Horizon Terminal, when fully operational, will be for petroleum, accounting for about 75% of its total storage for clean oil products.
Trafigura has approximately 196,000 cm of capacity, mostly for petroleum, at Vopak's terminal. It will have another 200,000 cm from its Tanjung Langsat terminal in neighbouring Malaysia, for both petroleum and middle distillates, which is due for completion by 2009.
Phase 1 of the Tanjung Langsat project, which will have 100,000-150,000cm of clean storage capacity, is expected to start operations in Q2 2008.
Sources say Trafigura, the world's third-largest independent trader with a turnover of $45 billion (32 billion) in 2006, will trade both middle distillates and petroleum from the Tanjung Langsat facility, the first terminal project in Asia in which it has an option to take an equity stake.
In total Trafigura, which trades about 1.7 million barrels of oil products and crude a day, has about 4 million cm of oil-related storages globally. Vitol, the world's largest independent trader, has about 500,000cm of clean storage facilities in Asia.
Singapore is expected to see surplus storage capacity next year, with another 4 million cm, or 69% of additional capacity, coming onstream, bringing the total in the city-state to about 10 million cm. Most of the capacity is for dirty oil storage, mainly fuel oil, and is expected to be operational by Q1 2008.