SOMO Signs Deal to Buy 1.5m Tonnes of Fuel

Iraq’s State Oil Marketing Organisation (SOMO) has signed a deal to buy nearly 1.5 million tonnes of gasoil and petrol for delivery over the first half of the year, according to Gulf News.

Gasoil

It is set to purchase two cargoes of 16,000 tonnes each of 0.1 per cent sulphur gasoil every month from Vitol at a premium of $9.67 a barrel to Middle East quotes, one of the sources said.

Overall volumes bought for gasoil are about half the usual volumes imported into Iraq every month, the source added.

“It’s still unclear how they are going to cover the rest of the supplies as they usually need about three to four cargoes a month,” he said.

Petrol

For petrol, Somo agreed to buy:

  • 400,000 tonnes from Gunvor;
  • 400,000 tonnes from Trafigura;
  • 200,000 tonnes from Total; and,
  • 300,000 tonnes from Vitol.

The prices for separate cargoes were not immediately available.

Kerosene

The company has not bought kerosene which it was seeking through the same tender and could likely be acquiring from Iran, according to one source.

Limited capacity

Somo had initially sought 1.365 million tonnes 92 RON petrol, 773,000 tonnes of 0.1 per cent gasoil and 292,000 tonnes of kerosene for delivery at the Khor Al Zubair terminal from January to June.

“The thing with Iraq is they never actually take as much as they contract for. Their terminal capacity is limited,” a Gulf-based middle distillates trader said

In November last year, Somo had clinched a deal to buy 600,000 tonnes of gasoil and petrol for delivery in the first half of 2012. Somo has a separate outstanding tender to buy 3,400 tonnes of gasoil a day for one year to use in power generation.

(Source: Gulf News)

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