Exxon offers rare Saudi gasoil term contract
Singapore, December 12, 2013
Exxon Mobil has offered gasoil cargoes through a rare term tender from its joint-venture refinery in Saudi Arabia, in a further sign that the country is becoming more self-sufficient in meeting its gasoil needs.
Gasoil from the Saudi Aramco Mobil Refinery Company (Samref) refinery in Yanbu, Saudi Arabia, which is a joint venture between Exxon Mobil and Saudi Aramco, is usually sold within Saudi Arabia, with the occasional spot cargoes offered for exports, traders said on Wednesday.
But Exxon Mobil has offered up to 6 million barrels of 500 ppm sulphur gasoil through a rare term tender from the refinery for loading next year, they said.
It has offered 11 to 12 cargoes of either 300,000 barrels or 500,000 barrels each of gasoil for loading from Yanbu, Saudi Arabia over January to December, next year.
The tender closes on December 12 and is valid until December 20.
"I've only seen a spot tender from them, but they have (a term contract) for the high sulphur gasoil," said a Singapore-based middle distillates trader.
"Cargoes have always been there but they normally keep (those) for themselves apart from during winter," he added.
A second trader added that gasoil cargoes of similar specifications were offered regularly for exports from the refinery a few years ago, but stopped about 3 to 4 years ago likely due to a rise in domestic demand.
"I would imagine they are fearing a slump in premium over 2014, and hence might want to capture a better premium now," a third Gulf-based trader said.
Saudi Arabia has historically been short of gasoline and gasoil. Its petro-dollar fuelled economy and growing population have rapidly driven up internal demand, especially when power generation surges in the hot summer months from May to August.
The country imported a record monthly volume of over 10 million barrels of gasoil in July, this year, up from a usual peak of 7 to 9 million barrels for the same month in previous years, official Saudi data showed.
The unexpected term cargoes from the Yanbu refinery are likely due to new refining capacity appearing in Saudi Arabia, which is expected to cut the country's reliance on fuel imports, traders said.
Aramco started oil product exports from the new Saudi Aramco Total Refining and Petrochemicals Company (Satorp) refinery in Jubail, Saudi Arabia from the second half of this year, which is expected to cut its reliance on gasoil imports.
"With Saudis taking some volumes from their new refinery, it's freeing up some volumes (from other refineries in Saudi Arabia)," said a Singapore-based trader.
Aramco Trading, the trading arm of Saudi Aramco, might skip its term gasoil imports for next year, a source close to the matter said.
This could possibly change trade flow patterns in the region and pressure gasoil margins, traders said.
Many refineries in Asia and the Middle East depend on Saudi Arabia's diesel imports to absorb excess cargoes in the region. With a significantly reduced demand from Saudi Arabia and even exports from its refineries, traders are worried the supply glut in Asia will pressure refinery margins.
Satorp, the first of a trio of 400,000 barrels per day (bpd) refineries due to open over the next five years, will refine Saudi heavy crude into fuels ranging from gasoil, including diesel, to gasoline and petroleum coke for domestic consumption and export.-Reuters
Tags: Exxon Mobil |
More Energy, Oil & Gas Stories
- Iranian oil import surges to one-year high
- Egypt will get oil aid from Arab states
- New technology for Bahrain's gas industry to save $300m
- Innovations key focus at Geoscience expo
- Iran seals gas export deal with Oman
- Total unit inks Elf Lubricants agreement
- Opec raises forecast for 2014 global oil demand
- Mitsui joins DME as trading member
- GE Power Conversion wins major SEC order
- Basra Light crude exports to rebound in April
- Aramco to produce unconventional gas for projects
- Alstom opens smart grid centre in Dubai
- Experts discuss key geosciences issues
- Egypt to permit factories to use coal for energy
- ME oil, gas transaction value up 15pc
- Victrex to showcase new product in Paris
- Aramco JV puts off giant refinery overhaul to 2015
- Libya threatens to bomb N Korean tanker
- Bahrain 'producing 850MW of surplus power'
- 2,000 experts for Bahrain geosciences summit
- Libyan rebels start oil exports, bypassing govt
- Dubai drilling company set for London IPO
- Opec output soars on higher Iraq exports
- S Korea to pay Iran $550m under nuke deal
- Qatar LPG exports will stay unchanged till 2018
- $14bn Bahrain energy sector focus for summit
- Iraq now world's fastest-growing oil exporter
- Old IT systems pose risk to oil firms
- Thomson Reuters adds commodity monitoring tool
- Oil below $90 to hit GCC economies