Geneva-based trading house Montfort Group is currently in talks with the fuel oil arm of Chinese state giant Sinopec Corp to potentially sell a portion or all of its refining facility located in the United Arab Emirates, according to information from at least five industry sources disclosed to Reuters.
If the discussions lead to an agreement, this deal would provide Sinopec, recognized as the world’s largest refiner by capacity, with a more substantial presence in the Fujairah market of the UAE. Sinopec’s interest in this acquisition aligns with its strategic objective to broaden its global footprint within the marine fuel market, following its entry into the Fujairah market last year.
Sources reveal that Sinopec is contemplating an investment in the refining facility to bolster its market share at the world’s third-largest bunker fuel hub, Fujairah.
In response to inquiries, a spokesperson for Montfort emphasized the company’s and its refinery partner Sheikh Ahmed Dalmook Al Maktoum’s unwavering commitment to the business. The spokesperson stated, “We are fully dedicated to our refinery operations. However, we are open to discussions with parties interested in collaborating with us if it benefits and expands our business.”
Situated in the port of Fujairah, the facility has the capability to process 65,000 barrels per day of crude oil and can supply over 30 million barrels of low-sulphur fuel oil annually to the shipping industry, as per Montfort’s information.
Last year, Montfort acquired the crude oil processing and marine fuel trading business from Germany’s Uniper Energy in a transaction valued at approximately $80 million. Montfort currently holds a Fujairah bunker supplier license under Montfort Trading FZE.
While Sinopec established a Dubai office last year for marine fuel trading in Fujairah, it does not possess a bunker license in the region.
Sinopec Fuel Oil, a leading marine bunker supplier at the Chinese bunker hub Zhoushan, ascended to become the third-largest marine fuel provider at Singapore, the world’s primary bunker hub, in 2023. Concurrently, the company has been expanding its storage capacity across Asia.
Driven by sluggish economic growth and the increasing adoption of electric vehicles in China, Sinopec has been exploring global expansion opportunities to counterbalance declining domestic demand.