Singapore: Petredec, one of the world’s largest LPG traders, is moving its sights towards more downstream and storage operations as it gears up to be a full LPG logistics leader. Founded in 1980 Petredec, now shifting more than 12m tons annually, is in a period of rapid expansion. Its fleet consists of 18 owned ships, 2 bareboat chartered, five on order and 32 on time charter. Giles Fearn, chief executive, says more newbuild orders will follow.
“Petredec is in a period of high investment in both shipping and downstream/storage,” says Fearn, adding: “We are looking to build with all sectors of the LPG shipping market.”
Currently yard prices are still “relatively low”, Fearn reckons. “We feel it is the right time to expand our fleet,” he adds.
Petredec’s business model, according to Fearn, considers the company as a whole, the full value chain from cargo supply, to transporting the product and supplying both its own downstream division as well as third party recievers.
The downstream operation is in its infancy and a large amount of investment is being made. A 15,000mt pressurised storage in Mauritius will be commissioned by the end of this year. This will be the world’s largest pressurised storage. Petredec also has downstream business in Reunion and Bangladesh and is actively looking at investments in South Africa, East Africa, the South Indian Ocean, as well as Southeast Asia and the Bay of Bengal.
“The LPG market is in a state of revolution,” Fearn says confidently. “New supply is constantly being discovered most notably in the US with its huge shale gas finds. The fundamentals would appear to be positive, but as with every shipping sector it is cyclical. Margins are high currently and therefore outside investors are entering the newbuild market. This will lead to a fall in margins further down the road.” [23/08/13]
NEED TO KNOW: Petredec
Petredec was formed in 1980 in a joint venture between a US-based company Petrolane and a Saudi company Redec with the desire to trade LPG in Europe and across the Atlantic. In 1987 Petredec bought its first gas tanker purchase. This was followed by the acquisition in 1989 of Caribgas Inc and three gas vessels operating in the Caribbean market. With an office in Singapore, opened in 1995, Petredec became the largest independent LPG supplier and shipper East of Suez, delivering on average 700,000mt per month of LPG. Worldwide, Petredec has grown into one of the largest independent LPG trading companies worldwide, handling 12m tons a year. Fleet consists of 18 owned ships, 2 bareboat chartered, five on order and 32 on time charter. Now investing heavily in downstream/storage operations.