CPC renews gasoil term with Vietnam Petro firm’s affiliate

SINGAPORE (Reuters): Ceylon Petroleum Co (Ceypetco) has renewed its gasoil term contract with PV Oil Singapore, an affiliate of Vietnam’s PetroVietnam Oil Corporation, industry sources said on Monday.

The term contract is for six months starting from April, with the first gasoil cargo expected to be delivered into Colombo in June, they said.

The premium negotiated was $ 1.57 a barrel above Singapore 0.25 per cent sulphur gasoil quotes, the sources added. Under the contract, PV Oil will every month supply one to two cargoes of about 300,000 barrels each depending on Ceypetco’s requirements, one of the sources said.

Both companies have had a term agreement since October last year, when a gasoil sales agreement was inked in Colombo. The previous term contract was negotiated at a premium of $ 1.58 a barrel to Singapore 0.25 per cent sulphur gasoil quotes, for the delivery of 6 cargoes over November to April, a source said.

Ceypetco’s spot requirements for gasoil to be delivered in July are expected to go up as its 50,000 barrels-per-day refinery completely shuts for a planned maintenance for two months from July.

The company is a regular buyer of gasoil, jet fuel and gasoline, typically purchasing about 800,000 barrels to over one million barrels every month, traders said.