Unipec, Vitol set to win tender to supply fuel oil to BD

FT ONLINE

Unipec Singapore and Vitol Asia have offered the best bids to supply 1.06 million tonnes of refined fuel oil products to Bangladesh Petroleum Corporation (BPC) next year.

The companies, if chosen finally, are expected to deliver petroleum products during the January-June period in 2020.

BPC's import costs will be lower as both suppliers offered lower premium rates for all but furnace oil and octane compared to its previous tender.

The premium rates they offered are also lower compared to BPC's existing premium rates for importing such products under term deals.

Premium rates will be added to international oil prices to determine the state corporation's oil import costs.

BPC eyes import of 880,000 tonnes of 0.05 percent sulfur gas oil (diesel), 110,000 tonnes of jet fuel, 40,000 tonnes of furnace oil and 30,000 tonnes of octane.

The state corporation will import the products under the tendering system in the first half of 2020.

Six firms, including Emirates National Oil Company, Petrochina Singapore Pte Ltd, PTTEP Singapore and Trafigura, submitted bids on November 25, the bid submission deadline.

A senior BPC official said that the state entity is currently evaluating tenders, which is expected to be done by next week.

A final deal will be inked over oil trading after getting the nod from the BPC board and cabinet committee on public purchase.

The high-profile panels usually award oil tenders to the best bidders.

BPC intends to import petroleum products under four groups, namely Group A, Group B, Group C and Group D on a CFR (cost and freight) basis at Chattogram port.

Unipec offered the best bid to supply 390,000-450,000 tonnes of diesel and 60,000 tonnes of jet fuel under Group A.

It has offered a premium of $2.33 per barrel to Mean of Platts Arab Gulf (MOPAG) to purchase diesel on a CFR basis and $3.32 per barrel for jet fuel.

Meanwhile, Vitol offered to supply 370,000-430,000 tonnes of diesel, 50,000 tonnes of jet fuel, 40,000 tonnes of furnace oil and 30,000 tonnes of octane under groups B, C and D.

It has offered a premium of $2.20 per barrel for diesel, $3.30 per barrel for jet fuel, $24.98 per tonne for furnace oil and $5.43 per barrel for octane.

BPC had floated tenders to import up to 1.06 million tonnes of petroleum products in the first half of 2020, down by 24.28 percent compared to that of 2019.

It imported 1.40 million tonnes of diesel, jet fuel, furnace oil and octane combined in the first half of 2019.

The state petroleum giant has been importing diesel from Unipec at a premium of $2.66 per barrel in the second half of 2019 on a CFR basis.

It has also been importing jet fuel at $3.66 per barrel from Unipec during the same period this year.

BPC has been importing furnace oil at a premium of $24.88 per tonne and octane at $4.10 per barrel from Vitol in the second half of 2019.

It imports annually an estimated 3.5 million tonnes of diesel, 2.0 million tonnes of furnace oil and 350,000 tonnes of jet fuel to meet local demand.

The state corporation sources almost half of its oil products through open tenders and the remaining half through government-to-government negotiations.

Kuwait Petroleum Corporation, Malaysia's Petco Trading Labuan Company, Emirates National Oil Company, PetroChina, Chinese Zhenhua Oil Company, Petrolimex Singapore of Vietnam, Philippine National Oil Corporation, Indonesia's Bumi Siak Pusako and Oman Trading are major suppliers of BPC under term deals.