Hin Leong reportedly in talks to sell stake in Universal Terminal

Singapore’s Hin Leong Trading Pte Ltd is reportedly in talks with China Petroleum & Chemical Corporation (Sinopec), Asia’s largest oil refiner, to sell its stake in Universal Terminal, an oil storage terminal located in Singapore, according to a Reuters report.

Hin Leong Trading last Friday filed for bankruptcy protection under section 211(B) of the Singapore Companies Act, as it sought to delay the repayment of billions of dollars of debt. Thus, the potential disposal of this asset could provide much needed cash as the company owes USD3.85 billion to 23 banks.

Developed at a cost of SGD750 million (USD527.17 million), Universal Terminal is one of the largest independent petroleum products storage facilities in Asia Pacific. Occupying 56 hectares of land at the southern end of Jurong Island, Singapore, Universal Terminal offers 2.33 million cubic metres of storage capacity and modern berthing facilities. The terminal has the only independently owned supertanker jetty on Jurong Island, which is the only access point to Singapore’s rock caverns, Southeast Asia’s first underground oil storage facility.

Hin Leong owns 41% of Universal Terminal, through Universal Group Holdings Pte Ltd., while another Chinese oil giant, PetroChina, owns 25%, and Australian investment bank Macquarie 34%. A previous sale of a stake in the terminal valued the terminal at more than USD1.5 billion in 2016. 

In addition to Universal Terminal, Hin Leong also owns Tuas Terminal, an integrated facility equipped with a 200m berth for barges, a 94,000 cubic metre tank farm and a lubricant blending plant.

“Sinopec is interested, and is evaluating the quality and cost of the asset,” Reuters quoted an official who requested anonymity.

Sinopec owns several storage facilities outside China, including Rotterdam, Antwerp, Fujairah, and most recently, Hambantota Port in Sri Lanka. 

Hin Leong and Sinopec did not respond to Reuters’ requests for comment.