CPC buys 400,000 tons of gas oil

The Ceylon Petroleum Corp (Ceypetco) has bought by tender 400,000 tonnes of gas oil from Trafigura for May to December supplies, a company official said yesterday.

Ceypetco awarded the regular semi-term supply of the 0.25 per cent grade at a discount of 2 cents a barrel to the monthly average of Singapore 0.25 per cent quotes, on a cost-and-freight Colombo basis, said the official, who declined to be named.

"We want to ensure the security of oil supply," said a second official. Sri Lanka consumes 30,000 barrels per day (bpd) of diesel, of which half is imported.

Ceypetco reduced its spot requirements after having locked in the term contract. It will award a tender soon, requesting 15,000 tonnes of similar grade gas oil and 25,000 tonnes of jet A-1 for delivery into Colombo on February 15-16.

The firm usually bought 40,000 tonnes of gas oil in every spot tender in the past. The tender closed on Wednesday. Reliance placed the lowest offer for the spot tender, with a premium of $1 a barrel for gas oil and plus $1.15 for jet A-1.

The other three participants were Shell, Vitol and BB Energy, with offers for gas oil ranging from plus $1.84 a barrel to plus $3.89 a barrel, and the premiums for jet A-1 were between $1.94 and $2.46 a barrel.

Ceypetco has an existing term contract to buy 480,000 tonnes of 0.25 per cent gas oil for delivery between July 2007 and June 2008, from Indonesian trading firm Titis Sampurna, at a discount of $25 a tonne to Singapore quotes, cost-and-freight basis.

Economic Times