Energy traders Unipec and Vitol have won a tender to supply Bangladesh Petroleum Corporation (BPC) with up to 1.06 million tonnes of oil products in the first half of 2020 after placing the lowest offers, two BPC officials said on Monday, reports agencies.
State-owned BPC is seeking 760,000-880,000 tonnes of gasoil with a sulphur content of 500 parts per million, 110,000 tonnes of jet fuel, 40,000 tonnes of 180-centistoke high-sulphur fuel oil and 30,000 tonnes 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 tonnes of gasoil and 60,000 tonnes 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 tonnes of gasoil, 50,000 tonnes of jet fuel, 40,000 tonnes of fuel oil and 30,000 tonnes 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 tonnes 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 tonnes will be imported in 2020. Bangladesh typically imports about 3.5 million tonnes of diesel and 2.5 million tonnes of fuel oil annually, making it one of the top 10 importers for those fuels in Asia.
BPC also buys 700,000 tonnes of Murban crude from Abu Dhabi National Oil Co annually and another 700,000 tonnes of Arab Light from Saudi Aramco for its only refinery.