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Wednesday, April 22, 2009

Hong Kong-listed trader buying VLCC for $24 million

Wednesday, 22 April 2009
Hong Kong-listed Strong Petrochemical Holdings Ltd is buying a re-sale VLCC for $24 million. According to a press release, the 1988-built 265,243 dwt single-hulled oil tanker is currently used to provide oil products storage services in the waters in Tanjung Pelepas port area, Malaysia, which is close to Singapore. “It can be used either as a floating storage facility by anchoring at a port, or as a vessel transporting oil products by sea,” said Strong Petrochemical.
Previous reports had said Strong Petrochemical is seeking to rent logistics and storage services from another Hong Kong-listed firm Titan Petrochemicals Group Ltd.
Titan has declined to comment on this possibility, while Strong Petrochemical did not state the owner of the floating storage facility.
Strong Petrochemical, which describes itself as principally engaged in the trading of oil products, attributed the VLCC purchase to plans for “extending its business operation to petroleum and petrochemical product storage operation.”
Titan, on the other hand, has been seeking to dispose of its VLCCs as it scales back activities in a volatile market.
Strong Petrochemical says its demand for storage services provided by the VLCC is expected to increase as it expands its oil trading business.
“At the current macroeconomic level, as crude oil storage is being built up by crude oil suppliers, among others, in the South East Asia region, demand for existing storage services is also expected to increase,” it added.

Source: Tanker World