UAE’s GP Global targets bunker sales growth, expansion

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The UAE’s GP Global expects its total bunker volumes to rise to 5.5 million mt in 2020, a year on year increase of 14.2% as it continues to expand into new geographies while eyeing several markets as well as Singapore to become a physical supplier, the company’s joint managing director Prerit Goel said.

This comes even though the pandemic has hit global markets severely, with the bunker market also slammed.
“With the COVID-19 outbreak, ports are imposing various restrictions. Our physical enquiries have dropped a little bit,” Goel told S&P Global Platts in an interview Tuesday.

“Still, we are doing fairly well in spreading our presence…our volumes look bigger than last year, reflecting the strength of our back-to-back trading operations,” Goel said.

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The is fairly balanced from the company’s west of the Suez and east of Suez set-ups, he said.

GP Global, which has operations across Europe, the Middle East and Asia and bunker trading offices that include Rotterdam, London, Geneva, Dubai, India, Singapore and Seoul, has recently commenced bunkering operations at the port of Jebel Ali with two barges.

“We expect 250,000 mt of additional volumes coming from Jebel Ali this year,” Goel said.

“In addition to Jebel Ali, we are looking at other physical supply locations,” Goel said, adding that the company has applied for a bunker supplier license in Singapore.

“We are hoping it [the Singapore bunker license] goes through as it [Singapore] is a bunker paradise due to its volumes,” Goel said.

The steps taken by the Maritime and Port Authority of Singapore make it a level playing field for all players and “we believe that there’s still some money to be made there,” he said.

The company is also expanding in more parts of the world. It recently opened up bunkering operations in the Americas, Goel said. The company appointed Gene Owen as of trading to strengthen its capabilities in that region, he said.

Demand destruction
A lot of shipowners were unprepared as the International Maritime Organization’s global sulfur mandate for marine fuels came into effect, Goel said.

The sharp rise in VLSFO prices at the start of the year as shipowners switched to cleaner fuels coupled with the weak dry bulk chartering market pushed a large number of less-fuel efficient ships to scrapyards.

“So, there was a huge supply in the demolition market thereby leading to some demand destruction there,” Goel said.

The COVID-19 is also set to lower bunker fuel demand. Fujairah and India, for example, will likely see at least a 10% drop in bunker sales volumes as slows, Goel said.

GP Global still remains cautiously optimistic, he said.

The global tanker market is still doing fairly well, with falling oil prices likely to bring some demand back to the market, Goel said. However, the dry-bulk and container segment might reel under the COVID-19 impact, he said, adding that this will likely weigh on bunker fuel demand.

Other growth
GP Global has established itself in the LSFO market, responding to the impetus on cleaner fuels due to stricter environmental rules in international shipping.

It is also looking at other growth options, including a bio-bunkering project in the Amsterdam-Rotterdam-Antwerp region, Goel said.

Earlier this month, the company said it bagged an order from Hindalco to set up a biomass boiler as it continued to explore non-conventional energy sectors to strengthen its position in the Indian market.

In order to foray into the segment, GP Global is in talks with some national in India for a potential collaboration, Goel said.

“We are talking to NOCs to build LNG logistics from a pipeline standpoint,” Goel said.

GP Global is also seeking opportunities to grow its oil products storage business, Goel said.

The company currently has a combined storage of roughly 1 million cu m across its terminals in Hamriyah (204,000 cu m), Fujairah (412,000 cu m) and Pipavav (250,000 cu m) in the western Indian state of Gujarat.

GP Global plans to grow this business through and has assessed opportunities but the valuations were too high to move forward, Goel said.

“These are unseen times but it’s a good time for players who are well positioned in the storage business to make money,” Goel said, adding that sellers are increasingly mulling storage options as airlines continue to slash their flight capacity and jet fuel prices tumble.

“The COVID-19 situation is temporary but a difficult one. It would be prudent to focus on the opportunities rather than unproductively succumb to it,” Goel said.
Source: Platts

Source: Investing.com

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