BW LPG is gaining control of up to five more VLGCs through its takeover of the LPG trading activities of Spain’s Vilma Oil.

The deal was announced in August as the Singapore owner sought to expand its three-year-old LPG trading operation, BW LPG Product Services.

Few details were given at the time, but now the company’s head of strategy and deputy CEO Kristian Sorensen has told a conference call with analysts that the plan is to add up to five of Vilma’s VLGCs to its pool in the coming months.

This “will have a consolidating effect on the freight market”, he said.

Founded in 1996, Vilma has offices in Madrid and Singapore and trades more than 4m tonnes of petroleum products per year, including LPG, naphtha, gasoil and fuel oil.

The extent of Vilma’s gas fleet is not known.

TradeWinds has previously reported that it has a VLGC on long-term charter from South Korea’s KSS Line and a stake in a modern VLGC owned by Solvang in Norway.

Regulatory approval has been granted by Spanish authorities for the acquisition.

“Following the closing, we will increase our trading activities under the name BW LPG Product Services, with presence in Singapore, Madrid as well as Oslo,” Sorensen said.

The unit will report on its own trading book and will operate on market terms like any other player in the market, he explained.

“When you ramp up the Product Services activities, we will add another layer to BW LPG’s commercial portfolio, which we are confident will increase our optionality and ability to adjust our exposure in the growing LPG markets,” the deputy CEO added.

Versatile product

“And as mentioned many times before, thanks to its versatility, green profile and competitive pricing, LPG is increasingly regarded as an alternative to more costly energy sources, and we look forward to participating in this growing market with an even larger footprint than before,” he said.

Sorensen told the call it is a bit early to guide on profit levels.

BW LPG’s trading division handles about 1m tonnes per year.

“With the acquisition of Vilma’s LPG trading activities, we will have a substantial increase in volumes and it’s going to be more than doubling, but it’s hard to, at this point, be kind of too specific, but it’s going to be a substantial increase in the trading volume compared to what we have today,” he said.