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Bangladesh finalises fuel term deals at lower premiums

Reuters

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By Ruma Paul

DHAKA, June 30 (Reuters) - Bangladesh Petroleum Corp (BPC) has finalised term contracts with 13 companies for refined oil product imports in the second half of 2015 at lower premiums than currently.

Two company sources with the direct knowledge of the matter said the premium for 180-centistoke quality fuel oil for the second half of the current year will be $24 a tonne premium to Singapore spot quotes, down from $29.95 for current term cargoes.

"The lower premiums are in line with a weaker 180-cst market in Asia seen in the first half this year," one of the sources said.

BPC finalised its gasoil with 2,500 parts-per-million (ppm) sulphur contract for July-December period at a premium of $4.49 per barrel over Middle East quotes, down from $4.50 per barrel for the second half of 2014.

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However, premiums for gasoil with 500 ppm was fixed at $4.50 a barrel over Middle East quotes, as the country aims to lower the sulphur content of its gasoil imports, in line with a global move towards cleaner fuel.

A shortfall in natural gas supplies has forced the South Asian country to turn to costly oil-fired power plants.

China Zhenhua Oil Company and Oman Trading joined the list of suppliers for the first time.

Other suppliers for Bangladesh's middle distillates contracts are Kuwait Petroleum Corp (KPC), Malaysia's Petronas, Emirates National Oil Company (ENOC), Philippines National Oil Company, Vietnam's Petrolimex, Indonesia's Bumi Siak Pusako, PetroChina, Maldives National Oil Company and Unipec.

Turkish Petroleum and Brunei Petroleum joined the growing list of oil product suppliers to Bangladesh during the first half.

Bangladesh is also in talks to import gasoil from India's Numaligarh Refinery Limited, energy ministry officials said.

Bangladesh imports 3.0-3.3 million tonnes of gasoil a year and around 800,000 tonnes of fuel oil to meet demand, while the country's sole Eastern Refinery produces some 350,000 tonnes of gasoil.

(Reporting by Ruma Paul, editing by William Hardy)