Thai oil firms plan regional expansion
Thai oil firms plan regional expansion
SINGAPORE (Reuter): Thai firms are fast establishing a presence in the oil trading industry, planning to expand further as regional demand and market access grow, industry sources said yesterday.
One of them, International Oil Tanking Pte Ltd (IOT), was formed just over a year ago and has already established a foothold in diesel trading in the region, especially in Indonesia and Indochina.
IOT's competitive edge is its fleet of one very large crude carrier, two 80,000-ton tankers and two 30,000-ton vessels.
The firm also leases out one 80,000-ton and two 30,000-ton tankers on a time-chartering contract, industry sources said.
With freight rates high, it is expensive to buy oil products, especially from the Middle East, on a delivered basis. "The vessels allow IOT to buy cargoes on an free-on board basis and gain some revenue from the price differential," one said.
IOT now plans to expand its fleet with two to four 30,000- ton vessels and one 80,000-ton tanker to help it start trading fuel oil from the Middle East and increase its gas oil trading volumes.
Initially, IOT's target market for the 2.0-percent sulfur fuel oil will be bunker suppliers and power stations in Thailand. It sees the Philippines and Singapore as potential markets for fuel oil. IOT has a floating storage off Singapore which it uses to blend heavier fuel oil into lighter grades.
IOT currently has an annual term deal with Saudi ARAMCO for 50,000 tons of gas oil a month.
It plans to widen its supply base to get the best price and is looking at Kuwait Petroleum Corp (KPC), Abu Dhabi National Oil Co and South Korean firms as possible alternatives.
IOT currently also buys spot diesel from Algeria, Russia and Rumania. It sells diesel to Vietnam through several Japanese trading houses with established links there. It seeks to expand its business into Cambodia and Laos.
IOT's sister firm, Cosmo Oil, which has no connection to its Japanese namesake, also seeks to expand its market share in Thailand, the sources said.
It has a term deal with KPC for 50,000 tons of gas oil a month which it sells to the domestic market.
Another Thai firm seeking to widen its net is state-owned Petroleum Authority of Thailand (PTT), industry sources said.
PTT has formed a subsidiary, PTT International, to specialize in importing oil products for the Thai market and for regional trading.
PTT International has forged a 50-50 joint venture with U.S. oil firm Coastal Petroleum in oil terminal operations at Subic Bay in the Philippines to gear up for deregulation of the Philippines oil market next year.