13 August 2019
Golden Ocean Group Limited and Frontline Ltd. today announced that they have entered into a non-binding term sheet agreement with Trafigura Group to establish a leading global supplier of marine fuels. Golden Ocean and Frontline will acquire 10 percent and 15 percent interests in the JV, respectively and Trafigura will contribute its existing physical bunkering activities to the JV. Subject to agreement on final terms, the JV is expected to commence operations in the third quarter of 2019 and will act as the exclusive purchaser of marine fuels for Trafigura, Golden Ocean, and Frontline, as well as certain entities affiliated with Hemen Holding Ltd, Golden Ocean and Frontline’s largest shareholder.
Birgitte Ringstad Vartdal, CEO of Golden Ocean Management AS and Robert Hvide Macleod, CEO of Frontline Management AS jointly commented: “It is anticipated that IMO 2020 will create logistical marine fuel supply issues for shipowners globally. 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. 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 and a real competitive advantage. We look forward to working with Trafigura, our JV partner, to create one of the world’s leading suppliers of marine fuels.”
Jeremy Weir, Trafigura’s Executive Chairman and CEO, commented: “Today’s announcement represents a further progression in the development of Trafigura’s response to the challenges and opportunities the impending IMO 2020 regulation will present. We look forward to providing an essential service to our clients and working closely with Frontline and Golden Ocean to grow this venture into one of the world’s leading suppliers of marine fuels in the coming years.”
Kenneth Dam, Trafigura’s Co-Head of Bunkering added: “Over the past 24 months, Trafigura has been growing its physical bunkering business worldwide. We believe that marine fuel market disruptions will be brought on by the implementation of IMO 2020 regulations and that the JV’s increased base volumes and greater access to both infrastructure and credit will provide increasingly competitive bunkering supply services to our customers. We are confident in our ability to supply quality products at competitive prices to the fleets controlled by the JV partners as well as to third party shipowners and operators.”