- Trafigura and Gunvor have taken over storage space in Singapore previously controlled by Singaporean outfit Hin Leong.
- The move by the two firms has seen them take on fuel oil storage leases held by Hin Leong at the Universal Terminal, according to the report citing market sources.
- The storage leases were re-assigned following the latter company’s move into court protection.
Trading firms Trafigura and Gunvor have taken over fuel oil storage capacity at Singapore’s Universal Terminal that was previously held by collapsed local company Hin Leong Trading (HLT), reports Argus Media.
The reassignment of the capacity comes after HLT applied to the Singapore courts for protection against creditors earlier this year.
Financial difficulties by fall in oil prices
Universal Terminal has 2.33mn m³ (14.7mn bl) of storage capacity in total, although it is unclear how much is used for fuel oil. The new leases have not been confirmed by Trafigura or Gunvor.
Trafigura has now increased its storage capacity at Universal Terminal to a total 220,000 cu m and Gunvor to 240,000 cu m in the third quarter, the report said although it had not been able to obtain confirmation of the move directly from the two oil trading companies.
Hin Leong sought court protection in April because of “severe financial difficulties” caused by falling oil prices, moves by bank lenders to reduce their exposure to the commodity financing industry.
The drop off in demand for oil products from the global pandemic has led to strong demand for landed storage in the oil products trading hub.
The collapse of the company, one of Singapore’s biggest oil trading firms, left banks facing hundreds of millions of dollars in losses and caused a scramble to claim almost 3mn bl of oil products cargoes linked to the firm.
Allegations of fraud have since emerged, and HLT’s founder Lim Oon Kuin was charged with abetting forgery earlier this month.
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Source: Argus Media
