Russia's Novatek sets up Singapore naphtha desk with ex-Arcadia staff

[temasek]

Russia's Novatek sets up Singapore naphtha desk with ex-Arcadia staff
Fri Jan 3, 2014 4:22pm IST
http://in.reuters.com/article/2014/01/03/naphtha-russia-novatek-idINL3N0KD19020140103

* Russian Novatek hires ex-Arcadia traders to spearhead business

* Novatek exports to add to record naphtha flow to Asia

By Seng Li Peng

SINGAPORE, Jan 3 (Reuters) - Russia's Novatek has started a naphtha trading desk in Singapore after hiring two traders that were previously with London-based Arcadia Energy, traders said on Friday.

Novatek said last month it registered Novatek Gas & Power Asia in Singapore and that the new, wholly-owned Singapore-based subsidiary would market products from its Ust-Luga condensate complex.

Traders at the Novatek office in Singapore declined to comment. The company spokesman in Moscow could not be reached as the office there is shut for the New Year holidays.

Novatek's exports to Asia will add to the inflow of western supply to the region that hit a record monthly average of 1.1 million tonnes last year, nearly double from 2012.

Novatek - controlled by its head Leonid Mikhelson and Gennady Timchenko, co-owner of trading firm Gunvor, which also has a naphtha desk in Singapore - exported its first naphtha cargo from the Ust-Luga complex in June of 2013.

The Ust-Luga complex is estimated to produce 2 million to 2.5 million tonnes of naphtha a year. Traders estimated that Novatek shipped an average of 150,000 tonnes of naphtha a month to Asia between July and December.

"By setting up a base here in Asia, it means either they want to increase their exports to the East or want to be more committed to Asia," said a Singapore-based trader.

"They could be better off marketing naphtha to Asia than selling in the west."

Petrochemical demand in Asia is growing, with China being the top importer despite the country adding new petrochemical capacities.

Traders said it was natural for the ex-Arcadia naphtha traders to join Novatek as they had previously traded the Russian barrels, although this could not be confirmed.

Among the customers Arcadia served were Taiwan's Formosa Petrochemical Corp, Asia's top naphtha importer.

Arcadia halted physical oil trading in Asia late last year after its crude and gasoline traders joined GlencoreXstrata in Singapore.