BEIJING Jan 18 Lim Oon Kuin left his ancestral
Chinese province with his family at age 12 seeking a better,
richer life. Now the patriarch of Singapore oil traders is
heading back to build a $1.7 billion oil storage centre that
could become Asia's largest.
O.K. Lim, as he is better known, began his oil career 50
years ago delivering diesel to Singapore boatmen in a rickety,
$1,000 truck that carried 30 barrels at a time.
The Meizhou Bay Port facility in the southern province of
Fujian in contrast would have an initial capacity of 10 million
barrels, with expansion plans that include a tank farm on a
purpose-built island with berths for 2 to 3 super tankers.
"It's a combination of a superb port, plentiful land and
China being a huge market," the founder and chairman of
Singapore's Hin Leong Group said in an interview.
Traders said proximity to the company's deep customer base
in north Asian markets means the storage centre -- with the
later phase that calls for a total capacity of 41 million
barrels -- would also likely serve more than the Chinese market.
After a blaze of expansion in the past five years, Lim's
family firm now owns one of the largest commercial storage
terminals in Asia. It has a fleet of 100 vessels with 8 million
dead-weight tonnage, and trades $14 billion of oil a year,
rivalling majors like BP and Shell in its home
EAST TIMOR PIONEER
Lim, who is six-foot tall, sports a grey crew-cut and turns
70 this year, also said during a recent trip to Beijing that he
was planning to build an offshore supply base for oil and gas
drilling firms and an oil storage terminal in East Timor, where
there has been a spike in exploration in recent years.
At an estimated initial investment of up to $1 billion, Hin
Leong could become the first foreign firm to build a sizeable
infrastructure project in the impoverished Pacific nation, which
potentially holds huge reserves of oil and gas.
"The East Timor project has been progressing smoothly," Lim
said. "The government has been very keen to provide the right
environment for investors."
Ten years after winning independence from Indonesia, East
Timor still lacks basic infrastructure and has difficulty in
drawing foreign investment. Its primary source of revenue is
from Timor Sea oil and gas fields -- shared with Australia --
from which it has built up a special oil fund with assets of
more than $10 billion.
But even pressing need hasn't always been enough for
projects to advance in the former Portuguese colony. Australia's
Woodside Petroleum for instance has been trying for a
decade to develop its Greater Sunrise gas fields in the Timor
Sea, which would add to Dili's oil and gas cash flow, but the
two have yet to agree on a development model.
Hin Leong's ambitious China project, a likely clone of its
$600-million, 14.5-million-barrel Universal Terminal in
Singapore, comes as growing demand from the world's
second-largest oil consumer has prompted the state oil companies
there to accelerate investment in oil storage.
Traders say it could take years to clear regulatory hurdles,
and with a handful of state firms dominating China's oil trade,
the project could struggle to be profitable.
Lim, drawn to the venture partly by hometown sentiment, said
he wished things could move faster in China, but trusted his own
business judgment in spotting a jewel before the competition.
Once the project is approved, Hin Leong aims to have one of
the country's big state oil firms as a partner. China's top oil
and gas producer PetroChina already has a 35-percent
ownership of Universal Terminal in Singapore.
Lim, a self-professed workaholic who once sometimes
delivered buckets of diesel by bicycle when his truck was busy,
still goes to the office everyday and clocks around ten hours.
"I am there to watch over the kids to see if they make any
mistakes," he said. "Oil is something that after you touch it,
it stains and stays on your fingers for 30, 40 years. After all
these years, I still haven't found the right detergent."
Hin Leong, which means "prosperity" in Mandarin, is owned by
Lim and his three children, with son Evan as executive director
of trading. The company has flourished in an industry dominated
by much bigger players, thanks to snappy decisions and its
armada of oil tankers, traders said.
As the company works to win approval to build a $6
billion-$8 billion refinery-petrochemical complex in Singapore,
possibly with a China state company partner -- its largest
planned investment -- Lim sees a natural move into crude oil
trading, a business long dominated by global majors and western
traders like Vitol and Trafigura.
Lim didn't elaborate, but hinted that Russia, East Timor and
Africa could be their sources of crude supplies.
Asked on plans to retire, Lim, whose father was too poor to
buy him long pants when they left China, and whose wealth Forbes
put at about $1 billion last year, smiled and said: "Tomorrow."
(Editing by Tom Hogue)