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Euronav picks Linggi Port as supply base for marine fuels

Deal marks milestone for Malaysia's bunkering industry, which aims to rival world's largest hub in Singapore

Kuala Lumpur

BELGIAN tanker operator Euronav signed a service agreement on Tuesday making Malaysia's Linggi Port its supply base providing low-sulphur marine fuels and other services for ships plying East-of-Suez routes, the port operator said.

"Linggi has a massive advantage, (being) right next to one of the busiest shipping lanes with deep waters to accommodate large ships," Alex Staring, chief operating officer at Euronav, said on the sidelines of the signing ceremony. "And there is no congestion, offering the flexibility to anchor immediately." The agreement also covers related services including supplying crews and provisions.

The announcement comes shortly after Euronav, one of the largest tanker companies in the world, sent one of its two ultra-large crude carriers (ULCC) to Kuala Linggi International Port (KLIP) for floating storage with three million barrels of 0.2 per cent and 0.5 per centlow sulphur fuel oil (LSFO), operator TAG Marine Sdn Bhd said in a statement.

Shipowners must cut emissions by reducing the sulphur content in fuel to 0.5 per cent from 3.5 per cent under rules set by the United Nations' International Maritime Organization that come into effect in January.

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Euronav has already provided 15 LSFO bunkering operations for vessels in its fleet since the Oceania arrived in Linggi on Sept 30. The 420,000 tonnes of bunker fuel it had on board should meet its demand requirements for about eight to nine months, Mr Staring said.

Euronav will initially only supply bunker fuel to its own fleet but is already in discussion with other operators, Mr Staring said.

The agreement also marks a milestone for Malaysia's ambitions to develop its maritime and bunkering industries, the statement said, in an effort to rival the world's largest hub in neighbouring Singapore.

"This (deal) is in line with our vision to fully utilise our advantages to develop our bunkering industry," said Malaysian Transport Minister Anthony Loke Siew Fook at the event.

Regional ports have for long eyed capturing a share of Singapore's lucrative bunkering market but have largely failed due to a lack of infrastructure, transparency or legal certainties.

But Malaysia's deal with Euronav might mark the beginning of a new trend if the right infrastructure and policies were introduced, several trade sources said.

"The ministry has set up a special committee to address where the opportunities lie in the bunkering industry that Malaysia should look into and optimise the advantages as well as ancillary services that Malaysia could offer the maritime world, especially in the busy Straits of Malacca," said Mr Loke.

Mr Staring added: "Singapore has a huge role to play since a lot of the service providers are there. But if we can attract more vessels to stop here then that will create a base for (service providers) to establish here." REUTERS

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