Qube links with TonenGeneral for fuel storage initiative

By: Rob McKay


James sees huge upside for TQ Holdings due to national capacity shortage

Qube links with TonenGeneral for fuel storage initiative
Port Kembla is a major jewel in Qube’s crown

 

Qube is pivoting into fuel storage at a time when local heavy refining is in terminal decline and just as Japanese refiner TonenGeneral Sekiyu is looking for growth outside its sluggish local market.

The Australian port services and logistics firm and TonenGeneral Sekiyu have formed an equal joint venture to develop major fuel storage facilities in Australia.

"The transaction provides Qube with further diversification within the import-export supply chain and an opportunity to enter an attractive market that is significantly under-serviced," Qube managing director Maurice James says

"The chronic shortage of fuel storage capacity in Australia presents a compelling investment opportunity, the appeal of which has only increased as local oil refineries close and Australia moves to a substantial reliance on imported fuel."

To be called TQ Holdings Australia and with Bradley Wheaton as CEO, it is spending $150 million in 2016-17 getting off the ground.

In an aggressive play, the new entity is buying or has already bought assets and local firms and gained early approvals.

TQ will kick off in Port Kembla after buying National Terminals assets on land to be leased from NSW Ports.

"Development and planning approval for parts of the facility have been obtained and the process for the remaining assessment is well advanced," Qube says.

"Subject to final approval, the storage facility has a potential capacity of 230 million litres with commissioning expected in mid to late 2017."

TonenGeneral is Japan’s second-largest refiner and a supplier of about 12 per cent of Australian needs.

"Australia is a major export market for TonenGeneral and we are delighted to be partnering with Qube to expand our activities into the onshore business in the Australian market, and jointly enhance Australia’s petroleum products supply chain," TonenGeneral representative director and president Jun Mutoh says.

The joint venture will retain the existing senior management team of Petro National which will be supported by the Qube and TonenGeneral management.

Wheaton was the founding director of National Biodiesel, which became Petro National and which has a small facility at Port Kembla.

Though quiet over the past few years, National Biodiesel launched its Soydiesel B20 product in 2009 and nailed supply deals with the likes of waste-management firm Sita, local councils and mining-related firms in subsequent years.

It is understood that Qube’s interest in the firm came during negotiations to set up its joint grains enterprise, Quattro, which is situated next door to the Petro National site.

Completion is expected in late August subject to satisfaction of a small number of conditions.

The move comes after a recent national debate on fuel security that saw the federal government admit the country was well under its internationally agreed strategic fuel reserves level.

Despite that, the subsequent Energy White Paper played down the importance of the issue.

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