US$461m investment in Singapore project will boost firm's trading activity PetroChina has agreed to take a 35 per cent stake in what will be the region's largest oil storage facility project to complement its growing overseas oil trading business, according to industry sources. The company, China's largest oil and gas producer, would invest US$461 million in the Universal Terminal project of Singapore-based private oil trader Hin Leong Trading on Jurong Island, said sources quoted by Reuters. The investment would help PetroChina reduce reliance on third-party facilities and gain flexibility in its oil trading activities, especially when importing oil into the mainland, oil traders said. An official at PetroChina's oil trading arm, PetroChina International (Chinaoil), told the South China Morning Post the investment had been 'pretty much decided', although it was not yet disclosable. PetroChina's spokesman in Beijing was unavailable for comment. Hin Leong's spokeswoman would only say: 'Details are still being worked out and finalised.' Hin Leong chairman Lim Oon Kuin said last month the project would have 2.3 million cubic metres of storage capacity and would be the 'single largest independent petroleum logistics terminal in the region'. He said the project would also include Singapore's second storage facility with a jetty for very large crude carriers. PetroChina set up its Singapore trading operation in late 2000 with trading volume of 2.48 million tonnes worth US$580 million, according to its website. A senior manager at a regional oil trading and logistics services provider said he believed the main purpose of PetroChina's foray into the storage sector in Singapore was to support its oil trading business. 'It is a good strategy to reduce dependency on third-party facilities,' he said. 'There are not that many independent storage facilities and you don't want to be caught in case there is a shortage of facilities.' Investment in storage facilities would also allow PetroChina to better time its trades, especially when product prices are volatile, he added. Chinaoil is also a member of a six-party consortium led by listed oil trading and logistics firm Titan Petrochemicals Group in a US$48.37 million, 400,000 cubic metre oil storage facility at Yangshan port near Shanghai. Titan is also building independent storage facilities in Guangdong and Fujian provinces to capture future growth in oil imports into the mainland as foreign firms are allowed to engage in oil wholesaling from December this year. China's oil imports grew 3.2 per cent to 126.8 million tonnes last year, after expanding 34.8 per cent a year earlier, customs figures showed. Singapore, the world's third-largest oil trading hub, had annual turnover exceeding S$260 billion ($1.23 trillion) in physical oil trade and S$300 billion in derivative trade in 2004, Mr Lim said.