HIP awards contract for oil trading works and O&M of its terminal to Sinopec

The Hambantota International Port (HIP), Sri Lanka, has awarded the contract for oil trading works and operation and maintenance (O&M) of its oil tank terminal along with associated facilities to Sinopec Fuel Oil Sales Corporation Limited.

Bunkering being an important part of the marine services portfolio offered by HIP, the oil tank terminal, in partnership with Sinopec Fuel Oil Sales Corporation Limited, will provide high grades of marine fuels compliant with the International Maritime Organization’s 2020 Low Sulphur Rule as well as other ancillary facilities to marine liners calling and passing through Hambantota.

“The partnership with Sinopec, which is one of the largest providers of bunkers worldwide, underlines our goal of becoming a bunkering hub for the entire region. Plans are already in the pipeline to expand our tank capacity in the near future,” says Ray Ren, CEO, Hambantota International Port Group (HIPG), adding that HIP intends taking maximum advantage of its location, just 10 nautical miles from the main sea route connecting the east and west, on which more than 31,000 vessels ply each year.

A total of 23 interested parties from Singapore, China, India, Dubai and Sri Lanka, had purchased tender documents and participated in the pre-bid meeting, held at the port. “The tender process was transparent and in accordance with international tender evaluation processes and practices,” says Tissa Wickremasinghe, Chief Operating Officer, HIPG. He adds that Sinopec was awarded the tender for its global network and terminal operation experience, as “We believe this cooperation would help us to provide cost-competitive and high-quality products as well as effective and safe services to our customers.”

Han Xueling, Deputy General Manager and Chief Accountant of Sinopec Fuel Oil Sales Corporation Limited, says, “With our capability as the largest oil product supplier in China, we considered it our responsibility to start the production and supply of low sulphur fuel oil (LSFO) and marine gas oil (MGO). HIP is one of the many ports across the globe to whom we would be supplying marine fuel in 2019, and we guarantee the supply of very low sulphur fuel oil to service all Indian Ocean vessels. We look forward to a long-term partnership with HIP which we consider a strategic hub in South Asia.”

Headquartered in Beijing, the Sinopec Group is the largest oil and petrochemical products supplier in China. The Sinopec Fuel Oil Sales Company covers all key ports in China’s coastal areas and operates in more than 40 overseas key ports. They own and operate 25 in-use oil depots with a storage capacity of more than one million cubic metres and have more than 100 oil barges in use. Their main scope of business includes fuel oil, distillate products, liquefied natural gas, liquefied petroleum gas, asphalt, chemical products, ship repair and marine accessories, and tank farm design and construction, with eight branches in Liaoning, Tianjin, Shandong, Jiangsu, Shanghai, Zhejiang, Fujian and Guangdong. They also have two wholly owned subsidiaries, Sinopec Zhoushan Petroleum Corporation Limited in Zhejiang Free Trade Zone, which owns China’s bonded oil business qualification, and Sinopec Fuel Oil Singapore Company. They also have a joint venture company with BP in Singapore.

With its wide network and expertise, the Sinopec Fuel Oil Sales Company would promote Hambantota port as another marine fuel supply centre for their global clients, to fully utilise the advantage of the strategic location of Hambantota Port. According to current trend, LSFO with 0.5 per cent sulfur content will be the main marine fuel choice in 2020. With their vast resources, Sinopec will guarantee the supply of LSFO and MGO in Hambantota, enabling the port to serve all vessels passing the Indian Ocean by the fourth quarter of 2019.

“Due to their global networking strength, Sinopec will be in a position to offer competitive pricing, opening doors for local parties hoping to provide bunkering services. We plan to expand the port’s capacity; in fact, we estimate the volume to surpass one million tonnes per annum in the space of five years, bringing us closer to our goal of establishing Hambantota Port as a bunkering hub in South Asia. HIP will also be looking at a number of associated services such as FW supply and sludge removal, which are already in the pipeline,” says Ray Ren, CEO of HIPG.