In a move to regain some of its former glory in the North West European crude oil and products market, Saudi Aramco Trading Company (ATC) has clinched a major 110,000 bpd supply deal with international independent private equity group Klesch Group. According to statements made by ATC, the deal entails the supply of 110,000 bpd of crude to the Danish Kalundborg Refinery, following the signing of an agreement with Klesch Group. The deal entails not only Arabian crude placement but also third-party crude and condensate, with a provision of refined products offtake. The move should be seen as a new adventure for ATC, and its mother company Saudi Aramco, as it attempts to re-enter or strengthen its former position in the North West European market.
The Saudi giant has been looking at new opportunities in this very attractive market where its once-great influence has been waning of late. From April 2020, when it posted record supply volumes of 312,000 bpd to the market, its total levels dropped to 32,000 bpd by August 2020. To regain its market share, especially in the still strong refining market of Amsterdam -Rotterdam – Antwerp (ARA), the company is searching for new inroads and entry points. Ibrahim Al Buainain, president and CEO of ATC, stated that the new crude deal will enable ATC to have additional transactions in Europe and other parts of the energy map. Klesch Group, with offices in London and Geneva, is known as a major investor in refineries in Europe and is known to have acquired Equinor Refining Denmark in December 2021, including not only the Kalundborg refinery but also a terminal in the northwest of Zealand, the Hedehusene terminal near Copenhagen and other assets.
ATC is currently very active in the market, in line with its main regional competitor ADNOC Global Trading from Abu Dhabi. In December 2021 ATC signed an MOU with Australian retailer United Petroleum for potential long-term fuel supply, product storage, and other business opportunities. Australia has the potential to be another major market for ATC as it is the largest fuel importer in the Asia Pacific. Australia’s domestic refinery capacity has decreased substantially in recent years. In the MOU ATC indicated that it will explore refined fuels sales to UP to meet Australia’s growing demand. At the same time, possible investments are planned in product storage and logistics. ATC at present is looking to grow substantially, not only in volumes but also inhouse traders and personnel. New offices are also planned in key trading regions.
By Cyril Widdershoven for Oilprice.com
Dr. Cyril Widdershoven is a long-time observer of the global energy market. Presently, he holds several advisory positions with international think tanks in the Middle…