Noble Group extends distillate trade to Asia, Europe
Noble Group, confident of steady demand despite the economic downturn, is extending its oil products trading globally, venturing into the Asian and European distillates market within the next few months.
To support its plans, the commodity and energy trader, an old hand in oil products trade concentrated in the United States -- also plans to boost its distribution and storage capabilities in oil hub Singapore and China.
"We have recently recruited a senior distillates trader in London and plan to build a global distillates team in the same way we have done for gasoline, methyl tertiary butyl ether (MTBE), fuel oil among other products," Chief Operating Officer Ricardo Leiman said told the Reuters Energy Summit.
As the financial crisis set, Singapore-listed Noble -- which had total revenues of around $36 billion in 2008 -- took it as an opportunity to grow its business, as it could more easily recruit the talents needed than during the oil boom days.
While European trader Projector folded in Asia, and Western trader Cargill left the region's gasoline market, Noble came forward to pick up some of the pieces. It sub-leased storage tanks from Vopak in Singapore's Jurong Island, which was previously leased by Cargill.
Noble then made its debut in the Singapore cash window by selling a gasoline parcel in early May, and has since sold at least three cargoes in the physical market.
"Some of our competitors have scaled down, but we see this as a major opportunity to grow our energy business into a global one," said Leiman, adding that energy revenues have historically been around 30 percent.
"We expect them to grow to 40 percent over time. Despite the economic downturn, demand has not been significantly hampered outside Europe and the U.S.," said Leiman, who joined Noble in 2006.
Fuel oil was the first of the oil products to go global since Noble is already a large consumer of the residues used as marine and utility fuel due to its logistics segment, which includes Noble Chartering. This unit has more than 120 ships servicing Noble's global supply chains.
For gasoline, two traders will be starting in its Singapore office soon. Naphtha traders have also been placed in Dubai and Asia, as well as a liquefied natural gas (LNG) trading team in London and the U.S., said Leiman.
It is also covering the European power and gas sectors, after recruiting three former executives from hedge fund GLG Partners Inc in London to spearhead the power and gas trading contracts.
Hong Kong-based Noble, which already holds storage tanks in China for vegetable oil, is now seeking opportunities to develop an energy storage terminal at Chinese port facilities.
It is also building up storage capacities around the globe. Toward year-end, construction works at its storage terminal in Brazil -- where it is building a new ethanol mill -- will be completed, and would give it 60,000 cubic meters of storage space.
"It can reach up to 200,000 cu m in the next few years," he said. It is also laying the groundwork for tank farms for distillates, ethanol, biodiesel, vegetable oil and gasoline in Rotterdam, which will reach 500,000 cu m in 2011.
Noble has also recently taken control of Australian Miner Gloucester Coal Ltd and is finalizing construction of a large-scale soya crushing plant in Argentina.
To support its plans, the commodity and energy trader, an old hand in oil products trade concentrated in the United States -- also plans to boost its distribution and storage capabilities in oil hub Singapore and China.
"We have recently recruited a senior distillates trader in London and plan to build a global distillates team in the same way we have done for gasoline, methyl tertiary butyl ether (MTBE), fuel oil among other products," Chief Operating Officer Ricardo Leiman said told the Reuters Energy Summit.
As the financial crisis set, Singapore-listed Noble -- which had total revenues of around $36 billion in 2008 -- took it as an opportunity to grow its business, as it could more easily recruit the talents needed than during the oil boom days.
While European trader Projector folded in Asia, and Western trader Cargill left the region's gasoline market, Noble came forward to pick up some of the pieces. It sub-leased storage tanks from Vopak in Singapore's Jurong Island, which was previously leased by Cargill.
Noble then made its debut in the Singapore cash window by selling a gasoline parcel in early May, and has since sold at least three cargoes in the physical market.
"Some of our competitors have scaled down, but we see this as a major opportunity to grow our energy business into a global one," said Leiman, adding that energy revenues have historically been around 30 percent.
"We expect them to grow to 40 percent over time. Despite the economic downturn, demand has not been significantly hampered outside Europe and the U.S.," said Leiman, who joined Noble in 2006.
Fuel oil was the first of the oil products to go global since Noble is already a large consumer of the residues used as marine and utility fuel due to its logistics segment, which includes Noble Chartering. This unit has more than 120 ships servicing Noble's global supply chains.
For gasoline, two traders will be starting in its Singapore office soon. Naphtha traders have also been placed in Dubai and Asia, as well as a liquefied natural gas (LNG) trading team in London and the U.S., said Leiman.
It is also covering the European power and gas sectors, after recruiting three former executives from hedge fund GLG Partners Inc in London to spearhead the power and gas trading contracts.
Hong Kong-based Noble, which already holds storage tanks in China for vegetable oil, is now seeking opportunities to develop an energy storage terminal at Chinese port facilities.
It is also building up storage capacities around the globe. Toward year-end, construction works at its storage terminal in Brazil -- where it is building a new ethanol mill -- will be completed, and would give it 60,000 cubic meters of storage space.
"It can reach up to 200,000 cu m in the next few years," he said. It is also laying the groundwork for tank farms for distillates, ethanol, biodiesel, vegetable oil and gasoline in Rotterdam, which will reach 500,000 cu m in 2011.
Noble has also recently taken control of Australian Miner Gloucester Coal Ltd and is finalizing construction of a large-scale soya crushing plant in Argentina.