Norwegian oil and gas firm Equinor has entered into a long-term agreement with Malaysia's Global Petro Storage for a terminal and storage for liquified petroleum gas (LPG) volumes in Port Klang, in South-East Asia.
According to statement from the petroleum and wind energy company, GPS will build a new facility to execute this agreement with startup of operations planned for mid-2021.
Equinor will bring LPG to the terminal and sell into the domestic market in Malaysia as well as selling volumes to markets like Bangladesh, the Philippines, India, Indonesia and Vietnam.
Equinor is already a significant LPG player with around 10 percent of the global waterborne LPG volumes.
With the new terminal and storage Equinor aims to capture a larger share of the attractive LPG market in South-East Asia.
LPG consists of the liquified gases propane and butanes and is used for transport and industrial purposes as well as cooking, hot water systems and heating. Use of LPG is recognized as being an attractive energy option for reducing greenhouse gases as well as improving indoor and outdoor air quality.
“Malaysia is an attractive market and we believe that we will be a competitive supplier to the wholesalers of LPG into the domestic market. The terminal and storage are also strategically located for blending and selling to other growing markets in the region,” says Molly Morris, vice president for Products and Liquids in Equinor ASA.
“We will source LPG from the North Sea, North Africa, the Middle East and Australia and utilize the opportunities the terminal and storage and our shipping positions give us to create value and strengthen our competitiveness,” says Morris and continues ‘This agreement is an example of how we are pursuing our strategy for asset-backed trading’.
As part of the agreement, Equinor will have an option to acquire an ownership share of the new storage and terminal, where Equinor will be the only user.
“Flexibility and robustness have been some of our key drivers for entering in this agreement,” says Giuseppina Ragone, vice president for Manufacturing and Storage in Asset Management and continues:
“The storage offers us considerable flexibility as it can receive gas tankers of all sizes and we can choose if we want to blend and prepare smaller quantities to deliver into the domestic market or other countries in the region, depending on which is most attractive. This way, active use of our assets can add value to our LPG business and be a long-term basis for value creation,” Ragone says.
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