U.S. military looking for up-to 476,000 T marine fuel for Asia

SINGAPORE: The U.S. military is seeking up to 476,000 tonnes of marine fuel to be delivered at various Asian ports, including Singapore, China and India, according to tender documents.

The fuel, for delivery between Oct. 1, 2011, and Oct. 31, 2016, comprises of around 391,000 tonnes of marine gas oil, 61,000 tonnes of 180-centistoke (cst) fuel oil and 24,000 tonnes of 380-cst fuel oil, according to the documents, posted on Feb. 4 on the website of the Defense Logistics Agency, the logistics arm of the U.S. Department of Defence.

"I've seen them come to the market before but the delivery period is usually around one year," said a Singapore-based bunker trader. "Five years is very long and probably only big players who can hedge long-term contracts can take these deals.

The total volume is not large when spread over five years and unlikely to impact the market, traders said. The amount of marine gas oil sought translates to around 78,000 tonnes a year, compared to 1.6 million tonnes sold last year in Singapore, the world's largest bunkering port.

The fuel will be used by U.S. military and civilian vessels at ports that come under U.S. Pacific Command's area of responsibility, the documents showed.

The logistics of potentially having to supply to such a large number of ports is also likely to deter sellers, the trader said.

The ports eligible to receive the bunker fuel also include Australia, Micronesia, Japan, Korea, Malaysia, Marshall Island, Northern Marianas, Philippines, the Maldives and Thailand.

U.S. investment bank Morgan Stanley and U.S firm 3D Global Solutions, which provide consulting services to organisations seeking to do business with the military, have so far indicated their interest in supplying the fuel.

Interested suppliers have to respond by April 8, 2011, according to the documents.