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BPC finalises fuel term deals at lower premiums

Bangladesh Petroleum Corporation (BPC) has finalised term contracts with 14 companies for refined oil product imports in the first half of 2016 at lower premiums than this year.

The average premium for gasoil for the January-June period will be $4.40 a barrel over Middle East quotes, down from $4.49 a barrel for the second half of 2015, two company sources with direct knowledge of the matter said on Thursday.

State-owned BPC will buy 2.46 million tonnes of gasoil in the next year, the sources said. The company will take 1 million tonnes of gasoil with 2,000 parts-per-million of sulphur from Kuwait Petroleum Corporation (KPC). The remaining 1.46 million tonnes will be gasoil with 500 ppm of sulphur, in line with the global trend towards cleaner fuels.

In 2015, it imported 2.6 million tonnes of gasoil, or about 53,000 barrels per day.

Total import volumes in 2016 will be almost the same compared with this year as 20 percent will be sought through a tender process, which awaits approval from the energy ministry, rather than by fixed contract, one of the sources said.

BPC’s term contract for jet fuel was fixed at a premium of $5.40 per barrel, down from $5.49 a barrel currently. It will buy around 320,000 tonnes of jet fuel in the next year.

BPC will stop importing fuel oil from next year and shift it to the private sector instead, one of the company sources said.

Private plants will import about 1 million tonnes of 180-centistoke fuel oil annually to generate electricity as a shortfall in natural gas supplies has forced the South Asian country to turn to costly oil-fired power plants.

Bangladesh’s sole Eastern Refinery, with a capacity of 33,000 barrels per day, produces some 350,000 tonnes of gasoil per year.

BPC will buy 600,000 tonnes of Murban crude from Abu Dhabi National Oil Co and another 600,000 tonnes of Arab Light from Saudi Aramco next year for the refinery, the company sources said.

Thailand’s PTT joined the growing list of oil products suppliers to Bangladesh for the first time.

Other suppliers for Bangladesh’s middle distillates contracts include Malaysia’s Petronas, Emirates National Oil Company, Philippines National Oil Company, Vietnam’s Petrolimex, Indonesia’s Bumi Siak Pusako, PetroChina, Maldives National Oil Company and Unipec.

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