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Thu 15 Jul 2010, 06:46 GMT

Oil firm issues fuel oil tender


Tender issued to purchase up to 14 cargoes of fuel oil for delivery between August and October.

Pakistan State Oil (PSO) has issued a tender to purchase 895,000 tonnes of fuel oil, according to industry sources.

Pakistan's leading oil marketer is in the market for up to 11 cargoes of high sulphur 180-centistoke (cst) fuel oil of 65,000 tonnes each, and another three 60,000-tonne cargoes of low sulphur fuel oil.

The parcels are to be delivered to Karachi on a cost-and-freight (C&F) basis between August and October.

The tender closes on July 26th and will remain valid until the following day.

PSO's latest fuel oil tender is 115,000 tonnes, or 15 percent, higher than the company's purchase last month of 12 cargoes of 65,000 tonnes for July-September delivery to the FOTCO (Fauji Oil Terminal and Distribution Co. Ltd.)Terminal in Karachi.

The state oil company was reported to have acquired the parcels from FAL, Bakri, and Trafigura at premiums of approximately $15.00-$16.00 per tonne to Middle East spot quotes, on a cost-and-freight (C&F) basis.

The 115,000-tonne rise in demand is said to be due to the fact that more power is used during the summer period.

In order to meet power generation demand, PSO typically purchases 500,000-600,000 tonnes of fuel oil per month from Middle East suppliers such as Sharjah-based FAL Oil and Saudi Arabia's Bakri International Energy Co. Ltd.

PSO is also said to act as an intermediary for the supply of bunker fuel to the country's national shipping company Pakistan National Shipping Corporation (PNSC) as well as to Pakistan's navy.

Last month PSO issued a tender for the purchase of 65,000 tonnes of fuel oil for use in the marine fuels market.

The company was seeking 30,000 tonnes of 380-centistoke (cst) fuel oil, 10,000 tonnes of low sulphur 380-cst and 25,000 tonnes of high sulphur 180-cst for delivery in July to its FOTCO Terminal in Karachi.

The parcels were all reported to have been purchased from Bakri with the 30,000-tonne cargo of 380-cst selling at a premium of $23.00 per tonne to Middle East spot quotes, C&F, and the 25,000-tonne parcel of 180-cst selling at $17.40 per tonne.

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