Trafigura to launch shipping fuel venture with Frontline, Golden Ocean (updated)
13/08/2019 09:13
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OSLO, Aug 13 (Reuters) - Trafigura Group is joining forces
with shipping firms Frontline FRO.OL and Golden Ocean GOGL.O
to set up a company to supply shipping fuels ahead of a shake up
in regulations next year which could disrupt fuel delivery and
cause prices to spike.
The three companies said on Tuesday that subject to
agreement on final terms, the joint venture is expected to start
operating in the third quarter.
From Jan. 1, International Maritime Organization (IMO) rules
will bar many ships from using marine fuel, also called bunker
fuel, containing more than 0.5% sulphur in order to help reduce
air pollution. The current limit is 3.5%.
Vessels with exhaust cleaning systems, known as scrubbers,
can continue to use high-sulphur fuels, but logistics become
more complex when multiple bunker standards co-exist, shippers
say.
"We believe ... the joint venture's increased base volumes
and greater access to both infrastructure and credit will
provide increasingly competitive bunkering supply services to
our customers," Trafigura said.
"We are confident in our ability to supply quality products
at competitive prices to the fleets controlled by the joint
venture partners as well as to third party shipowners and
operators," it added.
Dry bulk operator Golden Ocean and crude oil tanker firm
Frontline are both controlled by Hemen Holding, the investment
vehicle of Norwegian-born billionaire John Fredriksen.
"Our participation in the joint venture will ensure our
ability to source and acquire marine fuels at competitive prices
on a continuous basis," the two shipping firms said.
"This transaction represents yet another instance where we
have been able to...create significant economies of scale and a
real competitive advantage," they added.
Frontline and Golden Ocean will acquire 15% and 10%
interests in the joint venture respectively and Trafigura will
contribute its existing physical bunkering activities, the three
companies said.
(Reporting by Terje Solsvik; Editing by Susan Fenton and
Kirsten Donovan)
((terje.solsvik@thomsonreuters.com; +47 918 666 70; Reuters
Messaging: terje.solsvik.thomsonreuters.com@reuters.net))