* First fuel oil tender, part of move away from term deals
* No plans for more fuel oil imports this year through term
(Adds details on BPC’s fuel oil purchases, background)
Bangladesh Petroleum Corp (BPC)
has received offers in its first tender to buy fuel oil at
premiums lower than its term deals, two company sources said on
The tender was issued as part of an effort to move away from
direct-term deals with fuel products suppliers in a bid to buy
at cheaper rates.
A total of nine international oil and trading companies have
been competing to win the tender for 160,000 tonnes of
180-centistoke high sulphur fuel oil. The tender closed on July
20 and is valid till Oct. 2.
Vitol came up with the lowest offer of a premium of $15.80 a
tonne to Singapore spot quotes, while the state-owned BPC
imported fuel oil in the first half at a premium of $24 in term
deals with companies.
“Vitol will get the tender if all other papers submitted by
them fulfil terms and condition set out by the tender,” one
source said, adding that other documents were being scrutinised.
The tender was for delivery between August and December.
A shortfall in supplies of natural gas has forced Bangladesh
to burn oil, a more costly option, to generate electricity.
In February, BPC issued its first tender to buy oil products
in 15 years when it sought more than 11 million barrels of
diesel and jet fuel and managed to buy at lower rates than its
BPC imported 180,000 tonnes of fuel oil in the first seven
months of 2016 through term deals, but has no further plans of
shipping in fuel oil through term arrangements for the rest of
the year, a company official said.
Bangladesh buys fuel oil from several national oil
companies, such as Malaysia’s Petronas and Vietnam’s Petrolimex.
BPC’s 33,000-barrels-per-day refinery in Chittagong meets
about 30 percent of the country’s fuel oil needs for oil-fired
power plants. Until early 2010, Bangladesh was an occasional
seller in the Asian fuel oil market, offering small volumes of
about 30,000 tonnes irregularly.
(Reporting by Ruma Paul; Editing by Himani Sarkar)
The article UPDATE 1-Bangladesh fuel oil tender attracts lower premiums than term deals was originally published at Reuters - US Energy.