Norwegian energy company Equinor has inked a long-term deal with Singapore-based storage provider Global Petro Storage (GPS) for a terminal and storage of liquefied petroleum gas (LPG) volumes in Port Klang in Malaysia.
Under the terms of the deal, GPS will build a new facility 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.
“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,” Morris added.
According to Giuseppina Ragone, vice president for Manufacturing and Storage in Asset Management, the storage offers Equinor considerable flexibility as it can receive gas tankers of all sizes.
“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 said.
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.