Titan to expand fleet

Hong Kong oil trader, Titan Petrochemicals Group, has signed a one-year contract with China’s Zhuhai Zhenrong that will give it access to 3 million metric tonnes of Iranian fuel oil, valued at $600 million, for trading. Under the renewable contract, Titan will transport the fuel oil from Iran and then jointly trade it along with Zhuhai Zhenrong, which buys the fuel oil under a pact with National Iranian Oil Company.

Zhuhai Zhenrong, one of China’s four authorized state-owned crude oil importers, is China’s top import agent of crude oil from Iran and also a major buyer of Iranian fuel oil.

Iran is currently China’s second largest supplier of crude oil, after Saudi Arabia. “The contract becomes effective in January 2005 and we are actively sourcing the required vessels to add to our fleet of tankers,” Titan Chief Executive Barry Cheung said.

Titan operates 30 vessels of which ten are VLCCs and the remaining 20 are smaller product tankers. Titan and Zhuhai Zhenrong have also signed a letter of intent for the transport of 110 million tonnes of Iranian LNG over a 25-year period valued at $25 billion. Under the contract that is expected to be formally signed soon, Titan will transport 2.5 million tonnes of LNG a year beginning in 2008, with volume rising to 5 million tonnes a year in 2013. It wasn’t clear whether Titan will ship the LNG to China or elsewhere.