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Jan 17 (Reuters) – Montfort has emerged as the top bidder for Uniper Energy’s refinery in the United Arab Emirates, which produces low-sulfur fuel oil for the shipping industry, multiple people familiar with the matter said this week.
The deal could make Montfort one of two major suppliers of ship fuel at the world’s third-largest bunkering hub in the United Arab Emirates city of Fujairah, rivaling energy trader Vitol.
The Montfort takeover is worth about $80 million, sources said, while embattled German utility Uniper is divesting assets to achieve Condition The European Commission proposed in a 34.5 billion euro ($37.36 billion) company recapitalization plan.
Under the agreement, Montfort will take over Uniper Energy’s DMCC facility, which consists of two crude processing units focused exclusively on the supply of low-sulphur, environmentally friendly marine fuels, with commercial production commencing in 2017.
That would give Montfort control of Uniper’s estimated market share of more than 40 percent in Fujairah, a region that sells nearly 8 million tonnes a year, or 139,000 barrels a day of bunker fuel, the sources said.
Some sources said the companies were finalizing a deal, though one source said the deal had already been completed. Others in the running include Vitol and BB Energy, the sources said.
Uniper and Montfort declined to comment.
The Fujairah plant primarily processes African sweet crude, or sweet crude, and produces about 5 million tonnes of very low sulfur fuel oil (VLSFO) a year, according to Uniper and Refinitiv data.
Montfort has a fuel supplier license in Fujairah under the Montfort Trading FZE entity. The firm trades liquidity and commodities and also invests in assets and infrastructure, according to its website.
According to its website, Montfort has bought Kenyan oil marketing company Kencor Petroleum Ltd, bought stakes in Mozambique oil storage terminal operator Matola Terminal de Armazenamento de Petróleos SA and South African trader New Age Energy.
($1 = 0.9236 EUR)
Reporting by Florence Tan and Jeslyn Lerh in Singapore, Dmitry Zhdannikov and Julia Payne in London, Christoph Steitz in Frankfurt and Maha El Dahan in Dubai; Editing by Christian Schmollinger
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