OREANDA-NEWS. July 25, 2012. China Aviation Oil (CAO), Asia's top jet fuel buyer, has leased oil storage space in Singapore as it ramps up trading eight years after a scandal that nearly destroyed the company.

The company leased the tank space in the first half of the year to store middle distillates, a company spokeswoman said, declining to give details about the size of the storage facility, or from whom it has been leased.

The move is part of CAO's four-year plan of global expansion into new outlets, which has led the company to search for storage assets to feed into the outlets.

Traders said CAO, which imports more than 95 per cent of China's jet fuel needs, has taken storage at Vopak Terminal in Singapore where firms including Glencore, Reliance Industries, Morgan Stanley, ConocoPhillips and Total are said to have tank space.

"As we expand our geographical regions for trading activities, so long as a potential investment opportunity ... is able to create additional trading value to CAO ... we will consider (oil storage facilities)," the spokeswoman said.

She added that CAO will focus on new markets such as North America, Europe, Australia and the Middle East.

A Singapore-based trader said capacity was likely to be about 300,000 barrels, similar to the size CAO previously leased at Oiltanking's facility in Singapore, a storage space it later released.

Neither this figure nor its previous lease in Singapore could immediately be confirmed.

CAO's more visible trading presence comes eight years after the Singapore-listed company stunned markets with a USD 550 million trading loss when it took risky positions in oil derivatives, triggering Singapore's largest corporate scandal since the collapse of Barings Bank in 1995.

CAO was to form a joint-venture with Horizon Terminals to build and operate a facility on Singapore's Jurong Island until its financial problems forced it to withdraw from the project.