John Fredriksen Partners with Trafigura on Bunker Buying JV

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Published Aug 13, 2019 6:33 PM by The Maritime Executive

In anticipation of the upcoming IMO2020 fuel switch, John Fredriksen's bulker and tanker operations are partnering with commodities trading firm Trafigura on a new bunker-buying joint venture. 

Fredriksen-controlled tanker operator Frontline and bulker firm Golden Ocean will hold 15 percent and 10 percent in the JV, respectively, and Trafigura will hold the balance. The commodities firm will also contribute its existing physical bunkering operations to the JV.

The venture is expected to begin its activities soon, and it will act as the purchaser of marine fuels for Trafigura, Frontline and Golden Ocean, as well as other entities belonging to Fredriksen's holding company, Hemen Holding Ltd. 

Frontline owns 63 tankers with a combined capacity of 12 million dwt, and Golden Ocean owns or operates 77 bulkers totaling about 11 million dwt. Both are among the largest companies in their respective segments.

Kenneth Dam, the co-head of bunkering at Trafigura, said that the firm expects fuel market disruptions due to the IMO 2020 regulations, and the JV will help increase its competitiveness throughe large trading volumes and better access to infrastructure and credit. This could beneft Trafigura for sales to third-party shipowners too, he suggested. 

"In addition to presenting a compelling economic opportunity, our participation in the JV will ensure our ability to source and acquire marine fuels at competitive prices on a continuous basis," Frontline and Golden Ocean said in a joint statement. "This transaction represents yet another instance where we have been able to leverage our relationship with other entities of Hemen Holding Ltd to create significant economies of scale."