A joint venture between Malta Enterprise and Singaporean company International Energy Group (IEG) will eventually turn into an oil blending and bunkering operation, Malta Enterprise has told The Malta Independent on Sunday.
A recent statement by Digbiland (IEG's parent company) read that the objectives of the cooperation between the Singaporean company and Malta Enterprise is the wholesale and retail trading of crude oil, intermediate fuel oil and other distillates, building of storage facilities, blending of products for subsequent re-export, and collaboration on projects to reduce energy costs for electricity generation in Malta.
"IEG Malta will initially use Malta as an oil trading hub," said Malta Enterprise, which will have a minority shareholding in the company to be set up in Malta to support this Singaporean initiative.
Oil bunkering would see oil transported from one ship to another, while an example of oil blending would be crude oil blending, which would see lower grade crude oil blended with a higher grade in order to produce a blended product at the lowest cost using the minimum amount of higher cost crude oil.
"Malta is determined to become a major oil and gas trading, brokering and processing hub and this shareholding participation must be seen in this context," a Malta Enterprise spokesperson said.
"The company will facilitate business between different continents of the world through Malta, which is in line with Malta's economic strategy to do business in all corners of the world and to trade in different monetary currencies. Other benefits for Malta would include the income tax from the company's profit and the acquisition of knowledge in the sectors of crude oil, intermediate fuel oil and other distillates.
"The company has chosen Malta as its preferred oil hub in the Mediterranean due to its geopolitical location and proximity to mainland Europe".
This newsroom had sent a number of other questions including whether this project would require fuel storage units on land or out at sea as well as whether any areas or suitable locations have been highlighted, however Malta Enterprise could not disclose any more commercial information because such information is covered by the commercial secrecy clause of the Malta Enterprise Act, "and moreover because the ultimate shareholder is quoted on the Singapore stock exchange".
By August last year, the government had already publicly announced the idea of Malta as an energy hub, and in response to questions sent back then, the government replied: "Malta believes that the Mediterranean region offers an untapped potential in terms of security of energy supply and Malta is well placed to become an energy hub. The very idea of creating a Mediterranean Energy Platform is precisely to encourage more cooperation between the Mediterranean countries. This is a concept which is being explored further under the Italian Presidency and with the European Commission."
According to the Singapore Business Times, Digiland International is an "ailing IT company".
IEG Director Goh Jin Hian told the Singapore Business Times: "Malta has an island economy much like Singapore and Hong Kong, with little natural resources and a dependency on intellect and investment capital. I think Malta has the potential to punch well above its weight class."
The Malta Enterprise website read that the joint venture has been facilitated by the Maltese company Attard & Co. "IEG has been set up recently for the purpose of acquiring business from other companies on the Singapore Stock Exchange. The owners of IEG have 20 years of experience in the energy trade with worldwide partnerships. IEG's headquarters are in Singapore. Its principal activities comprise trade of Fuel Oil, Gas Oil, Crude Oil and Liquefied Natural Gas (LNG)".