April 23, 2020 / 2:18 AM / a month ago

RPT-Sembcorp says subsidiary cancels gasoil deal with Singapore's Hin Leong

(Repeats story published late Wednesday with no changes to text)

SINGAPORE, April 22 (Reuters) - Sembcorp Industries said on Wednesday that its subsidiary Sembcorp Cogen had terminated a gasoil supply and storage agreement with oil trader Hin Leong Trading (HLT), which is being monitored by Singaporean authorities.

Hin Leong could not immediately be reached for comment.

Sembcorp Cogen entered the deal with HLT in 2009 under which it bought gasoil reserves, for which Hin Leong provided storage and management services on its behalf.

Singapore’s Energy Market Authority (EMA) requires Sembcorp Cogen to have enough gasoil reserves for at least 60 operating days under the terms of its electricity generation license.

At least 30 days of the operational reserves must be located at Sembcorp Cogen’s generating premises or on a site approved by the EMA regulator, Sembcorp Industries said.

The carrying book value of the gasoil reserves stored with Hin Leong was S$94 million ($66 million) as of Dec. 31, last year, Sembcorp said in a statement on the Singapore Exchange.

“Given the recent news reports relating to HLT and the moratorium, Sembcorp Cogen has taken steps to protect its interests over the gasoil reserves and had terminated the gasoil supply and storage agreement,” Sembcorp said.

Hin Leong, one of Asia’s top oil traders, sought to delay repayment of billions of dollars of debt by filing a debt moratorium court filing in Singapore last week.

A statement issued by Enterprise Singapore (ESG), the Maritime and Port Authority of Singapore (MPA) and the Monetary Authority of Singapore (MAS) on Monday said the agencies were “closely monitoring developments related to Hin Leong Trading Pte Ltd and the broader oil trading and bunkering sectors”. ($1 = 1.4260 Singapore dollars) (Reporting by Jessica Jaganathan; Editing by Alexander Smith)

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