* CAO expects Chinese jet fuel demand growth to be flat
* Company eyes bio jet fuel, LNG
* To review what advantages it has in Australia
SINGAPORE, Feb 26 (Reuters) - China Aviation Oil (Singapore)Ltd, the sole importer of jet fuel into China, saidits fourth-quarter net profit fell 25.7 percent due to lowercontributions from associated firms.
CAO, the largest physical jet-fuel trader in theAsia-Pacific region, posted a net profit of $13.5 million forthe quarter. The full-year net profit rose 6.1 percent to $70.2million.
Chief Executive Meng Fanqiu said on the sidelines of its earnings briefings that CAO has its eyes on the bio jet fuel andliquefied natural gas (LNG) businesses although there are noimmediate plans to enter these two markets.
CAO, in which BP holds a 20 percent stake, had saidpreviously that it wanted to expand into trading of other oilproducts to limit its dependence on aviation fuel as growthslows in China.
Meng expects jet fuel demand in China this year to grow 10percent, flat from 2013.
At the same time, CAO is looking into setting up offices inplaces including the Middle East and Australia.
"Australia is an importing country and has tradingopportunities. We are interested, but we will be very cautious,"said Meng, who added that CAO needs to review what advantages ithas in Australia where major trading houses are vying for aslice of the fuel pie.
Australia has become one of Asia's biggest fuel importers,creating opportunities for traders as the majors have shutolder, small refineries, under pressure to shift investment tooil and gas production that generates better returns.
CAO has in late 2013 set up a London office and recruited anex-consultant of Morgan Stanley's commodities group based inSingapore to spearhead its trading business in its Los Angelesoffice.
The Chinese firm however expects continued volatility in oilprices due to market uncertainties and will remain cautiouslyoptimistic on core jet fuel supply and trading business.
The total amount of jet fuel supplied and traded by CAOcrossed 10 million tonnes in its 2013 financial year whiletrading volumes of other oil products rose 42 percent to 6.1million tonnes in the year, it said in a statement.
BP (BP.)
