China  Oil (Singapore) Corporation Ltd (CAO) said on Tuesday that they had signed a product storage agreement to lease storage facilities in Singapore in order to gear up its fuel oil business.

The agreement, inked between CAO and the Horizon Singapore Terminals Private Limited, will be taken into effect for three years as from Sept. 1.

According to the agreement, there will be five storage tanks with a combined storage capacity of about 174,000 cubic meters. The leased storage tanks will be used for fuel oil and fuel oil blend components.

The CAO has been diversifying its portfolio and seeking to be " a top-tier global integrated transportation fuels provider," aiming to expand its geographical focus from current  to the whole world.

"Leasing fuel oil storage facilities in Singapore for this capacity marks a milestone for CAO as this is a first for our fuel oil trading business. This is testament to CAO's commitment to grow and expand its fuel oil business," said Meng Fanqiu, chief executive officer of the CAO.

Singapore, located strategically between the growing fuel oil markets of Middle East and China, represents the largest fuel oil market in the world. "Having access to fuel oil storage facilities in Singapore is essential to the growth and expansion of CAO's fuel oil business, as it enhances our flexibility and trading capability in this market, as well as opens up new business opportunities in the Asia Pacific region," Meng added.

CAO is the sole supplier of imported jet fuel to the civil aviation industry of China. It also supplies jet fuel to airports outside the Chinese mainland in markets such as the Asia Pacific, ,  and the Middle East. It also engages in international trading of jet fuel and other oil products.