FACTBOX-Market impact of PetroChina-SPC trading merger

Nov 3 (Reuters) - PetroChina will merge its oil trading books with Singapore Petroleum Co (SPC) by the start of next year. This followed the Chinese major's $1 billion acquisition of a 45.51 percent stake in the Singapore firm belonging to Keppel Corp. The acquisition was completed on Oct. 16, after PetroChina's mandatory offer was accepted by remaining shareholders, giving it sole control of the company, and SPC was delisted from the Singapore Exchange six days later. Efforts to integrate the two company's trading operations are underway, with PetroChina expected to retain all of SPC's staff, with no retrenchments. The process is set to start in December and the two companies will trade as a single entity by the start of 2010. PetroChina also has marketing staff in China and Hong Kong who sell export barrels produced from their China refineries. "At the moment, they are still trying to figure out how best to streamline trading operations here and with trading personnel in China and Hong Kong as well," an industry source said. "It will be chaotic at the beginning but it should all settle down maybe in three to six months." For related analysis click * FUEL OIL - The merged fuel oil desk will have 18 people including four traders, handling a total 900,000 to 1.2 million tonnes of cargoes and with a combined bunker outlet estimated at 400,000-450,000 tonnes a month. Others include operations personnel and other support staff. - PetroChina trades 800,000-1.0 million tonne a month; with 300,000-350,000 tonnes sold into the Singapore bunker fuel market and the rest sold as cargo lots to other traders. Its supplies come mainly from its deal with Venezuela's PDVSA for three to four Very Large Crude Carriers (VLCCs) each month. - SPC has 80,000-100,000 tonnes of production from its 50 percent share at the Singapore Refinery Co (SRC) and buys additional volumes to meet its marine fuel commitments of 200,000-250,000 tonnes for both ex-wharf and delivered bunkers. - The 285,000 barrels per day (bpd) refinery has an estimated yield of 15 percent fuel oil, 40 percent middle distillates and 45 percent of light distillates, of which two-thirds are gasoline and a third is naphtha. Chevron Corp owns the other half of SRC. * MIDDLE DISTILLATES - The combined trading group will have four diesel and jet fuel traders. - SPC markets its refinery production of 1.6-1.7 million barrels of distillates per month. - PetroChina's Singapore team operates as a trading entity, buying and selling off its storage facility at Universal Terminal with capacity of 100,000-150,000 cubic metres. - Its total trading volumes are estimated at 150,000-200,000 tonnes a month, with a term deal for 15,000-20,000 tonnes a month into Vietnam, Asia's second largest buyer. - The Singapore team does not deal with the refinery barrels from China, which are sold by separate personnel based in China and Hong Kong. - The SPC team is focused more on marketing of middle distillates mainly under term contracts. It also trades swaps for hedging purposes. * GASOLINE AND NAPHTHA - The merged company will have three naphtha and gasoline traders. - PetroChina buys 20,000-25,000 tonnes of naphtha a month from Saudi Aramco and India, reselling to South Korean petrochemical producers. - Most of SPC's production of 600,000-700,000 barrels per month are sold under term deals to Petrochemical Corporation of Singapore (PCS). - PetroChina also trades spot gasoline, mostly to Indonesia, from its Singapore office, outside of exports from its refineries in China, which have been steady at 150,000-200,000 barrel a month, including for October. * STORAGE - PetroChina has 380,000 cu m of fuel oil storage at Singapore's Universal Terminal, in which it has a 35 percent stake. - SPC has 150,000-200,000 cu m at its Sebarok Terminal and another about 80,000 cu m at the SRC, which has a total capacity of 2.1 million cu m, mostly used for crude to feed the plant. - These combined storage capacities place the merged group as among the largest owners of storage capacity in Singapore. - The Chinese major has another 100,000-150,000 cu m of clean product storage, mostly for middle distillates. (Reporting by Yaw Yan Chong and Seng Li Peng; Editing by Ramthan Hussain) Keywords: PETROCHINA/SINGAPORE TRADE ([e-mail]; [phone]; Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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