China Aviation Oil will be second largest shareholder in OKYC

Jet fuel trader China Aviation Oil (Singapore) Corporation Ltd. (CAO) said it will invest around 34 billion won (US$32 million) for a 26% equity share in Oilhub Korea Yeosu Co., Ltd. (OKYC). CAO will be the second largest shareholder in OKYC, which is currently building a storage facility in Yeosu, South Korea. The Northeast Asia Hub Terminal will have a storage facility with an 8.18 million barrel capacity. The largest shareholder will be Korea National Oil Corporation, with a 29% stake in OKYC. SK Energy and GS Caltex Corporation are among the other shareholders. “CAO’s investment in OKYC is in line with its oil storage investment strategy and highly synergetic to its jet fuel trading business,” said Meng Fanqiu, chief executive officer of CAO. Prior to the deal with OKYC, CAO announced that it will invest US$10 million in an oil storage terminal located in Johor, Malaysia, which will be used exclusively by the company. This project in Malaysia was the first investment of CAO outside of China since the company’s restructuring in 2004. China Aviation Oil is the largest physical jet fuel trader in the Asia-Pacific region. It is also a major key supplier of imported jet fuel to mainland China’s civil aviation industry. After suffering a US$550 million loss in 2004, it was forced to undergo restructuring. Since then, the company has been able to pay its debt four years ahead of schedule. (October 8, 2011)