China’s Sinopec unit says Sri Lanka bunkering made competitive, LMS first customer
ECONOMYNEXT – Sinopec Fuel Oil Lanka Limited (SFOL), a unit of China’s Sinopec group located in Hambantota port, is making Sri Lanka’s ship bunkering more competitive by re-supplying domestic operators with lower cost bunkers, officials said.
Lanka Marine Services, a unit of Sri Lanka’s John Keells Holdings and the country’s top bunker operator which gets most of its business from Colombo port, is the first customer of its wholesale business.
LMS had chartered M V Kumana, a bunkering tanker based at Hambantota port to re-fuel MV Suez Hans, a crude carrier, with International Maritime Organization 2020 compliant with very low sulphur fuel oil (VLSFO).
“We intend bringing cost-competitive low sulfur fuel to all local players who will, in turn, bring their global clients to Sri Lanka,” Tao Lyu, General Manager of Sinopec Fuel Oil Lanka Limited said in a statement.
“We imported 25,000 tons of low sulfur fuel oil to HIP in April 2020, but the port could not begin bunkering operations because of the COVID-19 lockdowns.
“As operations are now reactivated, we are ready to supply and make mutually beneficial partnerships.”
Hambantota Port is 10 nautical miles off the main East-West shipping route allowing ships to re-fuel with the least loss of journey time. More than half the world’s container freight, about a third of bulk shipments and two-thirds of oil shipments, are estimated to take the route.
Hambantota port has a bunkering tank farm which is being run with Sinopec.
“This is a great opportunity for all Sri Lankan licensed Bunker Suppliers who are involved in supplying bunkers for vessels calling at any Port in Sri Lanka or plying the busy East-West shipping route,” Tissa Wickremasinghe, Chief Operating Officer of Hambantota International Port Group said in a statement.
“Through our partnership with Sinopec, one of the largest global players trading VLSFO, they are well-positioned to give competitive prices to attract vessels.
“With Sinopec entering the local market as a wholesaler the doors are now open to tapping into the economies of scale this global giant can provide.
“With the competitive prices they are offering, Sri Lanka can capture a larger regional market share of supplying bunkering for vessels, which will help all local players in this market to expand.
“International trade is all about building synergies and creating opportunity, and this is a very good example of that.”
Sinopec Fuel Oil Lanka operates under Sri Lanka’s Hub Act, which allows international trading and re-export services.
“As the world settles down into a new normal, trade and commerce are being re-engineered to create new synergies, which is what HIP is positioning itself for,” Ray Ren, chief executive of HIPG said.
“Any good venture must have dynamic partners, and this is one example of HIPG being inclusive in our approach to developing this multi-purpose port.”
Shipping firms can increase revenues and use tonnage for cargo by carrying fewer bunkers if vessels can be refuelled mid-journey at competitive prices. (Colombo/Feb28/2021)