Norway's Equinor signed a long-term agreement with Global Petro Storage (GPS) for the delivery and storage of LPG (liquefied petroleum gas) in Port Klang in Malaysia, the company said on Thursday.
Equinor said that GPS would build a new facility to execute this agreement with startup of operations planned for mid-2021.
Equinor will bring LPG to the terminal for sale to wholesalers where it will be distributed to Malaysia's domestic market as well as to markets in Bangladesh, the Philippines, India, Indonesia and Vietnam.
Equinor is already a significant LPG player holding around 10 percent of all global waterborne LPG volumes.
With the new terminal and storage facilities, Equinor aims to capture a larger share of the attractive LPG market in southeast Asia.
LPG consists of liquefied gases, propane and butanes, and is used in transport, for industrial purposes as well as in cooking, hot water systems and heating.
LPG usage is recognized as 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,' said Molly Morris, vice president for Products and Liquids in Equinor.
Morris added that Equinor would source LPG from the North Sea, North Africa, the Middle East and Australia.
The company will 'utilize the opportunities the terminal and storage and our shipping positions give us to create value and strengthen our competitiveness. This agreement is an example of how we are pursuing our strategy for asset-backed trading,' she said.
By Murat Temizer