China Merchants Enter Singapore Bunker Market

CMET has entered the Singapore bunker market.

China Merchants Energy Trading (Singapore) (CMETS), a subsidiary of China Merchants Group (CMG), is set to enter the Singapore bunker market with plans to supply the China Merchants Energy Shipping (CMES) fleet via trading activity as it works toward expanding a new market presence in wider energy trading.

"The overseas oil trading company will complement our shipping and logistics businesses, extend our supply chain and help manage fuel costs," Su Xingang, executive vice president at CMG said.

Local media quoted YQ Tan, CMET's managing director, as saying it had plans to trade 2 million tonnes of bunkers next year, and that the company may also explore the option of converting existing chemical tankers into bunker barges, as well as the conversion on Floating Production Storage and Offloading (FPSO) units to be used for oil storage and blending.

No moves have yet been made for CMET to acquire the appropriate Maritime and Port Authority of Singapore (MPA) licences to be a physical supplier in Singapore, Ship & Bunker understands. 

The company's new Singapore office is said to be expected to have more than 10 staff by next year as it looks to expand into trading of other products.

To that end, Tan stresses that CMETS is an energy trader, not just an oil trader: “Fuel oil is just the beginning. We want to follow that up with petroleum and other sources of energy, perhaps even LNG,” he told Tradewinds.

Singapore is also just the beginning for the venture, which is understood to already be eyeing Fujairah as a potential second bunker supply location.

CMET is a 70:30 joint venture of China Merchants Hoi Tung Trading and China Merchants Energy Shipping Co. (CMES).

The CMES fleet includes 37 very large crude carriers (VLCCs), and 11 very large ore carriers (VLOCs).

Risk management and finance matters of the new office are set to be handled by CMET's affiliates, including China Merchants Securities and CMES.