European oil trader Trafigura is set to profit on its storage capacity this fiscal year.
The company is counting on lower oil prices and higher market share, after the market liquidity downturn last year pushed out some players, lifting the bottomline.
The rise in profits this year would come on the back of an expected fall in turnover to $50-$60 billion (38.7-46.5 billion) from $73 billion in the financial year 2008, as crude prices retreat from the peak above $147 last July to around $45 a barrel on 11 March.
Trafigura, the world's third-largest independent oil trading firm, has 30 million barrels of leased and owned storage facilities worldwide, with slightly less than a third in Asia.
There's been a contango in the market, there's been significant reduction in prices. Those things combined in an environment where we have a super contango, Mike Scott, Trafigura's Asia head of crude oil and crude derivatives, comments.
Trafigura in Singapore will also be expanding into marine fuels and biodiesel businesses.
The company is expected to start bunkering operations out of Singapore in 2010, when its 20%-owned 400,000 m3 Langsat Terminal One in southern Malaysia fully starts up.
Clean products storage at the facility would likely come on stream in June, while fuel oil storage would start up in December or January next year.