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Unipec, Vitol win tender to supply Bangladesh with fuels in H1 2020

Energy traders Unipec and Vitol have won a tender to supply Bangladesh Petroleum Corp (BPC) with up to 1.06 million tons of oil products in the first half of 2020 after placing the lowest offers, two BPC officials said.

State-owned BPC is seeking 760,000-880,000 tons of gasoil with a sulfur content of 500 parts per million, 110,000 tons of jet fuel, 40,000 tons of 180-centistoke high-sulfur fuel oil and 30,000 tons of 95-octane gasoline.

“Unipec and Vitol have won the tender as they came up with the lowest bids,” a senior BPC official said.

The oil products are due for delivery from Jan. 1 to June 30, the tender document showed.

Six traders competed for the tender, another BPC official said.

Unipec - a trading arm of Chinese state major Sinopec - placed the lowest offer for up to 450,000 tons of gasoil and 60,000 tons of jet fuel at premiums to Middle East quotes of $2.33 and $3.32 a barrel on a cost-and-freight basis respectively, the official said.

The Asian unit of trading house Vitol submitted the lowest offers for the remaining oil products, which included up to 430,000 tons of gasoil, 50,000 tons of jet fuel, 40,000 tons of fuel oil and 30,000 tons of gasoline.

Vitol offered a premium of $2.20 a barrel for gasoil, $3.30 a barrel for jet fuel, $24.98 a tonne for fuel oil and $5.43 a barrel for gasoline.

BPC had also awarded Unipec and Vitol a similar import tender to supply nearly 1.35 million tons of oil products in the second half of 2019.

A shortfall in supplies of natural gas has forced the South Asian country to burn oil, a costlier option, to generate electricity.

BPC resumed issuing tenders for long-term contracts in 2016 as part of efforts to buy at cheaper rates after a 15-year hiatus, during which it negotiated directly with suppliers of fuel products.

Currently, BPC has term contracts with eight companies for refined oil product imports.

Suppliers for Bangladesh’s middle distillates contracts include Kuwait Petroleum Corp, Malaysia’s Petronas, Emirates National Oil Company, Thailand’s PTT, Indonesia’s Bumi Siak Pusako, PetroChina and Unipec.

Bangladesh has also signed a 15-year deal with India’s Numaligarh refinery to supply diesel, its first long-term contract with any Indian supplier, in which 60,000 tons will be imported in 2020.

Bangladesh typically imports about 3.5 million tons of diesel and 2.5 million tons of fuel oil annually, making it one of the top 10 importers for those fuels in Asia.

BPC also buys 700,000 tons of Murban crude from Abu Dhabi National Oil Co annually and another 700,000 tons of Arab Light from Saudi Aramco for its only refinery. (Reporting by Ruma Paul; Editing by Mark Potter)

 

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