T.A.G. Marine has signed a MoU with Toyota Tsusho Petroleum to explore bunkering.
A new Memorandum of Understanding (MoU) between Toyota Tsusho Petroleum and T.A.G. Marine may help Malaysia's planned 12.5 billion ringgit ($2.84 billion) Kuala Linggi International Port (KLIP) to scoop some of the Singapore's bunker traffic, Reuters reports.
Singapore-based Toyota Tsusho Petroleum is said to have recently signed the agreement with port operator T.A.G. Marine, one of the companies responsible for KLIP's development, to explore bunkering at the planned port.
"In KLIP, we have a newly developing port that will allow us to diversify our operations and better deploy our resources," said Nobuyuki Iida, general manager at Toyota Tsusho Petroleum.
KLIP is expected to have 1.5 million cubic meters (cbm) of oil storage capacity upon its completion within the next decade.
Some industry players suggest that, in addition to the infrastructure required for the port to be successful, work on Malaysia's processes and regulations must also be carried out to streamline operations.
Nobuyuki Iida, General Manager, Toyota Tsusho Petroleum
We have a newly developing port that will allow us to diversify our operations and better deploy our resources
"To get it right, (bunker suppliers) need support from the (Malaysia) government to have proper pricing and support from oil majors for cargoes to be competitive with Singapore," said Wan Mohd Fauzi, director of Malaysia-based bunker fuel supplier Alamgala Resources.
However, Singapore's current regulations on floating storage and ship to ship transfers is said to offer possible savings and streamlined business processes to KLIP's, suggests Agritrade Resources.
"Through our clients who are oil majors and oil traders, we see a competitive edge in locating our floaters (storage facilities) in KLIP resulting from lower costs and less congestion," said Ng Xinwei, CEO of Agritrade.
In April, it was reported that PetroChina Singapore (PetroChina) had leased fuel oil storage tanks at Malaysia's Port Klang with the aim of creating a bunker fuel supply outlet.