Vietnam Daily News

KPC, Petrolimex renew gasoil term deal for 2012

Written by Dailynews.vn Saturday, 10 December 2011 17:22

Kuwait Petroleum Corp (KPC) and Vietnam's Petroleum Import-Export Corp, or Petrolimex, have renewed their gasoil term agreement for 2012 at slightly lower volumes, industry sources said on Thursday.

Under the renewed term contract which was done through private negotiations, KPC will supply about 700,000 tonnes of gasoil to Petrolimex at a premium of above $1 a barrel to benchmark Middle East quotes, one of the sources said.

The premium was on a free-on-board (FOB) basis, the source added.

Of the total volumes, about 70 percent will be for 0.2 percent sulphur gasoil and the rest will be the 500 ppm sulphur gasoil.

The volumes were slightly lower than KPC's current contract to supply about 800,000 tonnes of gasoil to Petrolimex, likely due to a reduction in the Middle East refiner's production of higher sulphur gasoil, industry sources said.

For 2011, Petrolimex paid a premium of between 50 and 80 cents a barrel over Middle East quotes to KPC.

KPC and Petrolimex have a trading relationship since 1994.

Petrolimex has also finalised term contracts with at least six other suppliers to buy about 1 million cubic metres or about 6.29 million barrels of gasoil for delivery over January to December next year, at least two sources with knowledge of the matter said earlier this week.

It paid levels ranging from a discount of 30 cents a barrel to parity to Singapore quotes for the 0.25 percent sulphur gasoil on an FOB basis from South Korea and Singapore.

For the 500 ppm sulphur gasoil, it paid differentials of parity to Singapore quotes, a premium of 20 cents a barrel and a premium of 30 cents a barrel on an FOB basis for cargoes loading from South Korea, Taiwan and Singapore respectively.

Suppliers include South Korea's SK Energy and Hyundai Oilbank, Elico Oil, Unipec, PetroChina and Winson Oil, the sources said.

Source: www.intellasia.net/news/articles/business/111350351.shtml