Norwegian oil major Equinor and Singapore-based Global Petro Storage (GPS) have entered into a long-term agreement for a terminal and storage for LPG (Liquified Petroleum Gas) volumes in Port Klang in Malaysia. This forms part of Equinor's plan to bring LPG to the terminal and sell into the domestic market in South-East Asia.
The facility is planned to be fulfilled in the mid-2021. Equinor, which is a major player by holding the 10% of the global waterborne LPG volumes, plans to bring the LPG to the terminal and sell volumes to markets like Bangladesh, the Philippines, India, Indonesia and Vietnam. As such, the Norwegian company aspires to achieve a larger share of the LPG market in South-East Asia.
"Malaysia is an attractive market and we believe that we will be a competitive supplier to the wholesalers of LPG into the domestic market. The terminal and storage are also strategically located for blending and selling to other growing markets in the region"
... Molly Morris, vice president for Products and Liquids in Equinor ASA.
Under the agreement, Equinor will be the only user, since it has the opportunity for an ownership share of the new storage and terminal.
Equinor aims to source the LPG from the North Sea, North Africa, the Middle East and Australia via a 35,000 cubic metre-capacity terminal, which could handle 1.5 million tonnes of LPG annually.
The storage offers flexibility and robustness since it acquires room for gas tankers with a variety of sizes. Also, via this flexibility, the company will be able to opt whether it wants to mix and make smaller quantities for delivery to the domestic market or to other countries in the region. As a result, the LPG business is expected to gain value and quality assets.