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Glencore forms energy trading venture with Zhejiang Petroleum

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LNG Industry,

Reuters are reporting that Commodities trader Glencore has formed a joint venture with China’s Zhejiang Petroleum to trade energy products.

The move comes after China National Chemical Corp, known as ChemChina, and Swiss-based trader Mercuria expanded an equity tie-up, as foreign trading companies look to gain a foothold in the world’s largest energy consumer.

Top officials from the Zhejiang provincial government and Singapore-based Glencore executives attended the signing of the joint-venture contract on 26 April.

Both companies will invest 1 billion yuan (US$157 million) in the joint venture, Zhejiang Petroleum Trading Co, with Zhejiang holding a 71% share and Glencore the remainder.

The joint-venture company will be located in the Zhoushan Free Trade Zone in eastern Zhejiang province and will trade crude, oil products and LNG. The company also plans to apply for crude oil import quota.

Established in 2017, Zhejiang Petroleum is owned by regional utilities, state-owned coal producer Zhejiang Energy and privately owned refiner Zhejiang Petroleum and Chemical Co.

Glencore was one of the first western companies to trade China’s new Shanghai crude futures when the derivative was launched.

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