Asia/Pacific News
Stolt-Nielsen Likely to Win $300 Million Redevelopment Contract in Singapore
International news agency Reuters says five industry sources indicate Norway's Stolt-Nielsen is the frontrunner to win an estimated $300 million contract in the redevelopment of Jurong Port, a subsidiary of Singapore infrastructure specialist, Jurong Town Corporation (JTC).
Asia's largest oil trading hub, Singapore, is redeveloping the port on the western tip of the island.
The new facilities will have capacity for up to four million barrels of oil and chemicals - 3.15 million barrels of storage for oil, with chemicals taking up most of the remaining capacity.
The additional storage would increase onshore commercial storage capacity by approximately six percent.
The report said that a decision on the contract, originally due to be awarded in December, is expected within a few months.
China Aviation Oil (Singapore) and energy trading company Vitol also participated in the bidding.
According to the sources, Stolt-Nielsen is being favoured because of its experience in chemical shipping and storage, as well as terminal operations.
One source indicated that Stolt-Nielsen was also more willing to portion out a larger segment of the storage capacity to chemicals, putting them more in line with Singapore's broader plan to develop high value industries around the petrochemicals sector.
The report said that analysts familiar with Stolt-Nielsen indicated that the company's terminal business acts as a hedge to volatile shipping markets by offering a stable contribution to cash flow and profits.
"Stolt-Nielsen's terminals complement their chemical shipping and tank container businesses, and by investing in it they can pull in more business in the other segments too," Oslo-based analyst Erik Folkeson at Swedbank First Securities way quoted as saying.
A further advantage is the company has experience in Asia.
A Stolt-Nielsen subsidiary, Stolthaven Terminals, started operations at a 75,000 cubic-metre storage facility on Jurong Island in November 2011 and also has operations in China and Malaysia.
