A joint venture between PetroChina Co. and China Ocean Shipping (Group) Co. plans to apply for a license to sell marine fuels in Singapore to capture rising demand in the world’s biggest bunkering port.
China Marine Bunker (PetroChina) Co. is seeking the right to sell the fuel from the Maritime and Port Authority of Singapore, said two company officials who declined to be identified as they aren’t authorized to speak to the media. The company, known as Chimbusco, plans to acquire bunker barges and rent storage facilities in Singapore as part of process of obtaining the license. The application will be made soon, the officials said, without providing details.
China Marine Bunker, which began marine-fuel marketing in Singapore in August, joins Chinese rivals including Brightoil Petroleum Holdings Ltd. and Southern Petrochemical Co., a unit of China Petroleum and Chemical Corp., in trading shipping fuel in Singapore’s $1.4 billion a-month market. Sales of bunker fuel on the island reached a record 3.56 million metric tons in July, up 16 percent from a year earlier, according to the port authority.
“The company is securing footholds in Pacific Rim nations,” Kazuto Ishida, a senior trader at Peninsula Petroleum Ltd. in Tokyo, said by phone. “It is the right timing for them to enter the world’s biggest market. It will increase rivalry among bunker suppliers in Singapore.”
Demand for fuel oil has been increasing as more ships are calling at the port. Container vessel arrivals rose 10 percent to 1,609 from a year earlier in September, the port authority said.
Margin Pressures
The officials declined to provide details about barges and storages the company plans to operate. China Marine Bunker currently sells about 100,000 tons of bunker fuel a month, they said.
Increasing sales competition among bunker suppliers in Singapore is reducing margins. The price difference between delivered bunker fuel and fuel oil cargoes, known as bunker premium, averaged $2.55 a ton between July 1 and Oct. 14, according to Bloomberg’s data. This compares with $4.07 a ton in the first half of this year.
PetroChina is the nation’s biggest oil and gas company, while China Ocean Shipping’s unit China Cosco Holdings Co. is Asia’s largest shipping line by market value.
China Marine Bunker (PetroChina) Co. is seeking the right to sell the fuel from the Maritime and Port Authority of Singapore, said two company officials who declined to be identified as they aren’t authorized to speak to the media. The company, known as Chimbusco, plans to acquire bunker barges and rent storage facilities in Singapore as part of process of obtaining the license. The application will be made soon, the officials said, without providing details.
China Marine Bunker, which began marine-fuel marketing in Singapore in August, joins Chinese rivals including Brightoil Petroleum Holdings Ltd. and Southern Petrochemical Co., a unit of China Petroleum and Chemical Corp., in trading shipping fuel in Singapore’s $1.4 billion a-month market. Sales of bunker fuel on the island reached a record 3.56 million metric tons in July, up 16 percent from a year earlier, according to the port authority.
“The company is securing footholds in Pacific Rim nations,” Kazuto Ishida, a senior trader at Peninsula Petroleum Ltd. in Tokyo, said by phone. “It is the right timing for them to enter the world’s biggest market. It will increase rivalry among bunker suppliers in Singapore.”
Demand for fuel oil has been increasing as more ships are calling at the port. Container vessel arrivals rose 10 percent to 1,609 from a year earlier in September, the port authority said.
Margin Pressures
The officials declined to provide details about barges and storages the company plans to operate. China Marine Bunker currently sells about 100,000 tons of bunker fuel a month, they said.
Increasing sales competition among bunker suppliers in Singapore is reducing margins. The price difference between delivered bunker fuel and fuel oil cargoes, known as bunker premium, averaged $2.55 a ton between July 1 and Oct. 14, according to Bloomberg’s data. This compares with $4.07 a ton in the first half of this year.
PetroChina is the nation’s biggest oil and gas company, while China Ocean Shipping’s unit China Cosco Holdings Co. is Asia’s largest shipping line by market value.