Singapore adds two bunker players, hangs tough during COVID-19

The Maritime and Port Authority of Singapore (MPA) has awarded two new bunker supplier licences to Minerva Bunkering and TFG Marine, following its call for applications for new licences in December 2019.

“These two new players will increase the supply of marine fuel that is compliant with the International Maritime Organization (IMO) 2020 sulphur regulations in the Singapore bunker market,” the port authority said.

Minerva Bunkering and TFG Marine are related entities by shareholding to Mercuria Group and Trafigura Pte Ltd respectively, two of the world’s largest independent energy trading companies.

The duo brings the total number of MPA-licensed bunker suppliers to 45 in the Port of Singapore.

Minerva Bunkering and TFG Marine will also be required to each operate at least two clean energy dual-fuelled bunker barges, providing more sustainable bunkering activities in the port.

The world’s largest bunkering hub said that its bunkering services and oil trading remain resilient despite the global COVID-19 pandemic.

Bunker sales in Singapore grew 5.4%, from 12.07 million tonnes in the first quarter of 2019 to 12.72 million tonnes in the first quarter of 2020, the port’s data shows.

The port added that Singapore is undergoing a successful transition to IMO 2020 during the pandemic, adding that it would carry out periodic reviews to establish a regulatory framework that ensures the quality and availability of bunker in the port.

Commenting on the situation concerning the troubled oil trading firm Hin Leong Trading Pte Ltd, which revealed in a court filing that it hid $800 million in losses and that it owes $ 3.85 billion to more than 20 banks, the port said its bunkering industry would not be seriously impacted by the developments.

“There may be some short-term minor disruptions due to the lapse of contractual obligations by Ocean Bunkering Services and Hin Leong Marine International. The Singapore bunkering sector is well diversified with 43 other licensed bunker suppliers, including Minerva Bunkering and TFG Marine which recently received their licences,” the port authority said.

Hin Leong is related to UT Singapore Services Private Limited which owns Universal Terminals by common shareholdings, Universal Terminals is operated independently of Hin Leong. Besides Universal Terminals, there are other independent oil terminal operators in Singapore including Vopak, Oiltanking and Tankstore. 

The port authority, Enterprise Singapore (ESG) and the Monetary Authority of Singapore (MAS) added they were closely monitoring developments related to Hin Leong and the broader oil trading and bunkering sectors.

“MAS is in close contact with the banks on developments related to Hin Leong. MAS agrees with the assessment by ESG and MPA and has reminded the banks not to de-risk indiscriminately from the bunkering and oil trading sectors. Banks should, however, continue to apply judicious credit assessment on individual borrowers to manage their risks,” a statement from the port reads.

“The banks are well capitalised and diversified in their exposures to these sectors. MAS is also closely monitoring liquidity and credit conditions in the market which, on the whole, continue to be supportive of households and businesses. “