The State Trading Organization (STO) has entered into a term sheet agreement with the Vitol Group, the world’s preeminent energy trader. The agreement, a significant milestone in the Maldives Economic Gateway Project, paves the way for establishing an international bunkering facility in Ihavandhippolhu Atoll, the northernmost geographical atoll of the Maldives.

The Vitol Group, a multinational energy and commodity trading company with Swiss roots and Dutch ownership, has a historic trade relationship with STO. The term sheet agreement was signed on Wednesday in the presence of Minister of Economic Development and Trade Mohamed Saeed by Shimad Ibrahim, the Managing Director of STO, and Jay Ng, a Director at the Vitol Group.

STO envisions this project as a catalyst for global trade, potentially matching the success of the tourism industry in the Maldives. As part of the partnership, Vitol will leverage its extensive network to position the Maldives as a strategic bunkering hub in the Indian Ocean and contribute to the development of the technical capability of the industry. The term sheet serves as a preliminary agreement, outlining the formalities required to commence the international bunkering business at the Maldives Economic Gateway.

Vitol, a global leader in the energy business with a presence in 40 locations worldwide, annually sells 12 million metric tonnes of crude oil as bunker fuel. It is the largest physical bunker supplier in the Middle East and one of Singapore’s largest suppliers of bio-marine fuel.

Under the agreement, Vitol’s primary responsibility is to ensure the supply of fuel required for bunkering services and to promote the Maldives as an international bunkering hub through its extensive network.

The agreement stipulates the availability of both heavy fuel oil and marine gas oil needed by the boats, with the potential for LNG and biofuel to be made available in the near future. STO will serve as the physical bunker supplier at the Maldives Economic Gateway, per the terms of the agreement, according to the company.

The government has identified Ihavandhippolhu Atoll as a key area in its strategic plans to diversify the economy. Designated as the Maldives Economic Gateway, the area is planned to house an international port, a strategic oil terminal, and other maritime-related activities.