Jurong Port said to be in talks for oil storage hub stake

Government-owned Jurong Port is in advanced talks to buy a stake in a petroleum storage hub from the family behind collapsed oil trader Hin Leong Trading, according to people with knowledge of the situation.

The deal is for the roughly 40 per cent stake in Universal Terminal held by the family of Lim Oon Kuin, better known as O.K. Lim, the sources said, asking not to be identified as the matter is private.

The sale would still need to win support from Hin Leong’s creditors, one of the sources said.

It is unclear if other bidders who were previously exploring their own deals are still challenging Jurong Port for the stake.

If the sale goes through, it could help monetise one of the biggest assets held by the Lim family, which is grappling with the fallout that has hit Hin Leong amid allegations of fraud.

The former heavyweight in global marine fuel trading owes US$3.5 billion (S$4.7 billion) to more than 20 banks in one of the biggest commodities scandals in decades, while some creditors and court-appointed managers have taken legal action against the family to recover the money.

A Lim family representative did not respond to a request for comment.

Universal Terminal comprises the bulk of the Lims’ business assets, which also include the trading house and a fleet of vessels.

A Jurong Port spokesman also declined to comment.

The storage hub counts PetroChina and Macquarie Asia Infrastructure Fund as its other shareholders.

A spokesman for PetroChina International (Singapore) said the company is unable to comment on this issue. A Macquarie spokesman also declined to comment.

Universal Terminal started operations on Jurong Island in 2008, and its facilities, which include 78 storage tanks and 15 jetties, offer 2.33 million cubic m of storage capacity, according to its website.

Universal Terminal was developed at a cost of $750 million, making it one of the largest independent petroleum-products storage facilities in Asia-Pacific.

Jurong Port, which is a wholly owned subsidiary of JTC Corporation, operates ports and terminals handling cement, steel, containers and fuel in the city-state. The company also has overseas ventures in China and Indonesia.

BLOOMBERG

Source: The Straits Times