Top China LPG Buyer Considers Singapore IPO for Trading Unit

(Bloomberg) -- Oriental Energy Co., China’s biggest importer of liquefied petroleum gas, is considering an initial public offering of its trading and logistics unit on the Singapore stock exchange.

The company is in discussions with the exchange and the city-state’s government about the share sale for its subsidiary Oriental Energy (Singapore) International Trading Pte., according to an official at Nanjing-based Oriental. Other locations are being considered for the planned IPO including Hong Kong, said the official, who ask not to be identified due to company policy.

“Oriental Energy is keen to further tap into the global capital markets,” the company said in an emailed response to questions. “A potential IPO in the future, if proved strategic, will not be ruled out.”

China’s LPG imports have increased more than fourfold since 2013, underpinned by the start-up of new plants that turn the fuel into the building blocks for plastic production. The nation’s petrochemical sector will be the main driver of oil-product demand growth this year, with the appetite for LPG, ethane and naphtha growing faster than other fuels such as gasoline, the International Energy Agency said last year.

For BI’s take on China’s propane to chemical plants, click here

Oriental Energy operates four import terminals in China for LPG, which is used for cooking and to make plastic. The company imported about 5 million tons of the fuel last year, more than a quarter of the country’s overseas purchases, according to the official, who declined to provide details on the timing of the share shale as discussions are at an initial stage.

Singapore is an emerging LPG trading hub and the city-state could be a good IPO location given its growth potential and business integration with other countries in the region, the official said, adding that its unit trades more than 20 cargoes a month.

To contact the reporter on this story: Saket Sundria in Singapore at ssundria@bloomberg.net

To contact the editors responsible for this story: Serene Cheong at scheong20@bloomberg.net, Ben Sharples, Andrew Janes

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