SIL set to reap RM60m per year from Lumut Port’s fuel bunkering

KUALA LUMPUR: Straits Inter Logistics Bhd’s (SIL) 55 per cent unit Tumpuan Megah Development Sdn Bhd (TMD) has kicked off its bunkering operation in Lumut Port.

In a recent statement, SIL said it is set to benefit from the bunkering of 80,000 vessels passing through the Straits of Malacca annually.

On October 1, 2019, TMD signed a Fuel Bunkering Services Agreement with Lumut Maritime Terminal Sdn Bhd – the operator of Lumut Port for a year with the option to renew for another year, upon mutual agreement.

A bunkering anchorage area namely Pit-Stop Bunker Hub @ Lumut has been set up for this new business venture.

Lumut Port appointed TMD to exclusively operate, manage and provide bunkering services located at or within Lumut Port limit including jetties/wharfs, anchorage area and designated Pit-Stop Bunker area.

SIL managing director Datuk Sri Ho Kam Choy said TMD had deployed its bunkering vessel Escolar providing low sulphur marine gas oil (LSMGO) to the 19,127 dwt bulk carrier BMC Endora on October 19, 2019 to kick off the operation.

“The Pit-Stop Bunker Hub @ Lumut offers shipowners and operators an opportunity to ‘jump the queue’ for bunkers-only calls when compared to lifting bunkers at other regional ports,” he said.

SIL is conservatively targeting to supply up to two million litres of fuel per month for a start. This translates to around RM60 million in revenue per year.

Ho said SIL expects this new operation to contribute positively from next year, onwards.

“This is part of the company’s overall strategy to establish collaboration with strategic ports across Malaysia to bunker for vessels.

“This collaboration with Lumut Port allows both parties to tap the vast potential in the bunkering industry,” he said.

Ho said Singapore is currently the world’s largest bunkering hub, with sales of 49.8 million tonnes of fuel in 2018 and most of the ships passing by the Straits of Malacca to do their bunkering in the city state.

This translated to some 50 million tonnes of fuel valued at US$20 billion, last year.

“We see a huge opportunity here and we would like to capture some of the value from Singapore’s bunkering industry,” Ho said.

SIL is engaged in oil trading and fuel bunkering services and investment holding activities.

At present, TMD operates in nine ports across Malaysia. They are Lumut Port, Pasir Gudang Port, Tanjung Pelepas Port, Johor Bahru Port, Kuantan Port, Kemaman Port, Kuala Terengganu Port, Labuan Port and Miri Port, all of which are licensed under Petroleum Development Act 1974 (PDA Licences) for its bunkering services.

It has an enlarged fleet size of 11 vessels with a total carrying capacity of 22 million litres.

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