November 25, 2011 [The Business Times] - At least three loaded floating oil storage supertankers have been allowed to remain anchored in southern Malaysian waters, more than three months after the Malaysian government ordered their eviction.
A total of seven converted very large crude carriers (VLCCs), with a capacity to hold up to about 1.9 million tonnes of crude and fuel oil, were initially reported to be in the Pasir Gudang area when the quit notice was issued in August.
Two have managed to get licences to stay in the area: the One Emerald, leased by Mercuria, and Nasa Unity, jointly utilised by Thailand’s PTT and Azerbaijan’s Socar, moved further from shore, but are still within the vicinity of Pasir Gudang at Malaysia’s southeastern tip, the sources said.
A third vessel, the Front Queen chartered by Arcadia to carry crude, has also been given a similar permit, the sources added. The Front Queen was not one of the seven VLCCs that had been ordered to leave the area.
‘Their new positions are further out, closer to the outer-port-limit fringe, and away from the area slated for development. That’s why they have been allowed to remain around the Pasir Gudang area,’ a trader said.
Malaysian government officials were not immediately available for comment.
The Transport Ministry had served the quit notice to the vessels as it seeks to improve access along the shallow southeastern waterway that separates Johor state and Singapore, an area earmarked for major development of the country’s oil infrastructure.
So far, three of the original seven VLCCs have moved to new locations.
The Brilliant Jewel, housing Vitol’s fuel oil cargoes, has moved to the southwestern port of Tanjong Pelepas, another main anchor point for floating storages.
The other two – the Mayfair and Titan Venus, chartered by ConocoPhillips and Trafigura respectively – have both found new homes at Linggi, southwest of Malaysia, near Port Dickson, the sources said.
Traders said ConocoPhillips may be ending its lease of the Mayfair soon. The lease contract on two vessels has also expired, traders said.
‘In this backward-dated market, storage of fuel oil is not an attractive option to most players anymore. Linggi is also not the most ideal location for a fuel oil-carrying vessel because it’s a little far out to lift supplies from for the bunker market,’ another trader said.
The Titan Seema’s short-term lease to carry Vitol’s crude supplies has finished, and Vitol has not been seen leasing any new floating storage facilities for crude.
The Ticen Ocean is also no longer being used by Mercuria to store their fuel oil supplies. The vessel is currently drydocked and may be scrapped, one of the sources said.
