Geneva-based trading house Montfort Group is in talks with China Petroleum & Chemical Corporation’s (Sinopec) fuel oil arm, Sinopec Fuel Oil, for the sale of part or all of its refining facility in the UAE, reported Reuters, citing at least five industry sources.

This potential deal could significantly enhance Sinopec's efforts to expand its sales at the world's third-largest bunker fuel hub.

A Montfort spokesperson said the company and its partner in the refinery, Sheikh Ahmed Dalmook Al Maktoum, are fully committed to the business.

The spokesperson said: “Of course, if we are approached by parties who wish to be involved in our refinery business, we are always willing to discuss such opportunities if we believe that it would enhance and grow our business.”

Located in Fujairah's port, the facility boasts a processing capacity of 65,000bpd of crude.

Montfort claims it can sell more than 30 million barrels of low-sulphur fuel oil per year from the refinery, to the shipping industry.

In 2023, a consortium of Montfort and the private office of Sheikh Ahmed Dalmook Al Maktoum agreed to acquire a 100% stake in the oil refinery in the UAE from Germany's Uniper Energy.

The sale forms part of the European Commission’s remedies package required for approval of the bailout and subsequent nationalisation of Uniper that was agreed in 2022.

Montfort operates under the licence of Montfort Trading FZE in Fujairah.

The talks come as Sinopec seeks international expansion, driven by slowing domestic demand in China due to economic headwinds and a shift towards electric vehicles.

In September 2023, Reuters reported that Sinopec launched a new unit, Sinopec Overseas Investment Holding, to invest in overseas petrochemical and refining assets.