Hin Leong’s first ever on-shore storage almost fully booked
Nine months before its completion, Singapore oil trader Hin Leong Trading’s $490 million oil terminal is almost fully booked, reports claimed today.
“Over 80% of the terminal’s capacity has already been committed, with signed contracts. Discussions are going on for the remainder tankage,” Hin Leong director Evan Lim, told the Singapore Business Times. “We are encouraged by the response,” he added.
Universal Terminal is a 73-tank project on Jurong Island which will store 2.28 million cubic metres (m³), or 14.25 million barrels, of both crude oil and oil products such as fuel oil and gas oil.
Hin Leong started project construction in January 2006 amid strong regional oil demand that has also led other players to expand or embark on new storage capacity here.
Emirates National Oil Company (ENOC) – which last September completed its first tanks at its joint venture Horizon Terminals on Jurong Island – is already planning a third phase, adding another 250,000-300,000 m³ to the 950,000 m³ facility.
“The outlook for terminalling is quite positive, with good demand for storage here as there is a lot of contango in the market from crude oil to products,” Lim was quoted saying. Contango is a situation when delivery prices for futures exceed spot prices, and there is therefore value for the trader to store the oil.
Main shareholder Hin Leong with 65% and its partner, Chinese oil giant PetroChina with 35%, will together account for about 30-40% of Universal’s overall capacity.
Industry players believe that Universal will allow PetroChina, China’s largest oil company, to trade more actively in Singapore as well as hold oil stocks here in support of the Chinese market.
Universal Terminal will have its own 12 berths and it will be only the second such facility here with two jetties specifically for very large crude carriers (VLCCs).
The terminal will enable Hin Leong – which has for many years kept its oil aboard VLCCs anchored outside port limits – to finally have on-shore storage.
