Chemoil family in talks to sell 51 pct - sources

SINGAPORE, June 24 (Reuters) - The family of Chemoil Energy (CHEL.SI) founder Robert Chandran is in talks to sell its 51 percent holding in the marine fuels supplier, with trading giant Glencore the frontrunner for the $240 million stake, sources familiar with the deal said on Wednesday.

Glencore International AG, the world's biggest commodity trader, is still in negotiations after a bidding process that began in February, when Glencore, Europe-based oil trader Vitol and Wall Street bank Morgan Stanley (MS.N) were vying to buy the stake, one source who was involved in the process told Reuters.

The value of the bids was not disclosed.

Two sources familiar with the talks said Vitol was no longer in the running, while three industry sources said negotiations were now focused on concluding a deal with Glencore.

Chemoil, Morgan Stanley and Glencore spokesmen declined to comment on the deal. Vitol was not available to comment.

The Chandran family is being advised by UBS (UBSN.VX), two other sources familiar with the deal told Reuters.

The family has been looking to sell for at least a year, after founding chairman Chandran was killed in a helicopter crash in Indonesia in January 2008.

Buying Chemoil would give Glencore, already the second largest independent oil trader, a valuable marine fuels business in the United States and a wealth of fuel storage assets in Singapore and Asia, strengthening its physical trading playbook at a time when global storage tanks are at a premium. (Additional reporting by Saeed Azhar, Jennifer Tan and Seng Li Peng in SINGAPORE and Michael Flaherty in HONG KONG) (Reporting by Luke Pachymuthu in DUBAI and Yaw Yan Chong in SINGAPORE, Editing by Jonathan Leff and Ian Geoghegan)