SINGAPORE, March 9, 2015:
Oil pricing agency Platts said it is considering a proposal to reflect deliveries from Pengerang Terminal in southern Johor in its Singapore pricing assessments for middle distillates and gasoline.
This will be in addition to approved loading points outside of Singapore such as Pasir Gudang, Tanjung Langsat, Tanjung Bin and a few floating storage units, Platts, a unit of McGraw Hill Financial Inc, said in a note to its subscribers today.
The move is expected to offer traders more flexibility in loading cargoes and improve market liquidity, traders said.
The Pengerang terminal, majority owned by a 51-49 joint venture of Dialog and Dutch oil and chemicals storage company Vopak, started operations last year.
It has six berths and an initial storage capacity of about 1.3 million cubic metres.
The storage terminal is one of several upcoming energy projects in Pengerang, including a refinery and petrochemical integrated development by Petronas.
While Singapore is Asia’s largest oil trading hub, a scarcity of land has hit growth of the business there.
This has spurred billions of dollars of investment on the construction of storage facilities in neighbouring Malaysia and Indonesia.
Platts, which provides Asian benchmark assessments for most oil products traded in the region, is planning to change the loading points in its pricing assessments for fuel oil, gasoil, jet fuel and gasoline from July 1.
It will introduce free-on-board (FOB) Straits benchmarks to replace the existing FOB Singapore benchmark, where traders will not have to specify a loading port at the time of placing a bid or offer in its pricing process and could include cargoes to be loaded from approved terminals in either Singapore or south Malaysia.