KUALA LUMPUR: GF Offshore Sdn Bhd will start providing bunkering services at Lumut Port in Perak for cargo ships that are traversing the Straits of Malacca.
GF which will provide these bunkering services, also known as the provision of refuelling services, for cargo or container ships said it would like to tap demand from the second busiest waterway in the world.
“We have two major clients: Tenaga Nasional Bhd and Vale. We plan to hit our target of 70,000 tonnes (of ship fuel) in a period of three months from June onwards. Then in the fourth or fifth month we plan to bring the floating service unit to be based in Lumut Port with a capacity of 50,000-100,000 tonnes. This will involve an investment of about US$50mil,” GF chief executive officer Datuk Seri Mahendran Chelladorai said at a press conference after the launch yesterday.
“We aim to trade a conservative 1.2 million tonnes of fuel per annum, and to double the volume within the next two years,” he added.
The business model that GF uses will see it partner other companies so that the company itself will be asset light.
It will be the first and sole bunkering operator at Lumut Port.
“Many oil and gas (O&G) companies believe they need to build capabilities across the entire value chain. In a dynamic market, however, the owner-operator model is a disadvantage as the costs incurred may outweigh the value generated,” Chelladorai said.
“There are some operators such as vessel operators where their business is not that good today. So we are working with KLBFuel and STRAITS INTER LOGISTICS BHD.
“They’ve got 12 fleets but it is underutilised. This smart partnership will see everyone coming together to develop this business,” he added.
He said the fuel will be sourced from the usual O&G names such as BP, Sinopec and PetroSummit.
The company expects demand to be strong, given the congestion being experienced in Singapore presently.
“We have anchored GF’s growth trajectory with two blue-chip companies. We will also be servicing vessels from other local and international corporations at Lumut Port. And we also want to capture market share of vessels traversing the Straits of Malacca by promoting Lumut Port as a cheaper and time-saving alternative to Singapore,” he said.
“Singapore is doing 50 million tonnes a year of bunkering. If we can do 5% of that amount, it is already 2.5 million. And from this volume we can pull our partners together to utilise everybody’s excess capacity,” GF chief financial officer Loke Chow Wing said.
Loke explained that some ships may not find it economical to stop at Singapore just for bunkering services as this takes up additional time and costs.