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.