Ceypetco to sign oil product procurement deal with ONGC
Sri Lanka's Ceylon Petroleum Corp. (Ceypetco) will sign an oil product procurement agreement with India's state-owned
Oil & Natural Gas Corp. (ONGC), a Ceypetco official said. This will see Ceypetco buying 2.4 mm-3.6 mm barrels of
gasoline, jet and gas-oil -- equivalent to two 300,000-barrel cargoes each month -- exclusively from ONGC over the
next four to six months.
"We'd have to finalize the deal by this weekend as our first shipment will load soon," the Ceypetco official said.
The deal is part of a $ 150 mm credit line that India has extended to Sri Lanka for the import of India's oil
products. ONGC will supply oil products from its affiliated Mangalore Refinery & Petrochemicals, which runs and
operates a 195,000 bpd refinery in Mangalore.
The first shipment -- comprising 180,000 barrel of 0.25 % sulphur gas-oil and 120,000 barrel of jet -- is scheduled
to be delivered to Colombo soon. A second cargo of the same combination is scheduled for May.
Ceypetco and ONGC have yet to finalize the term premiums for each product. Each month, Ceypetco usually imports
360,000 barrel of gas-oil, 120,000 barrel of gasoline and 120,000 barrel of jet fuel. Most of its imports are
supplied by Indian refiner Reliance Industries Ltd. (RIL), and to a lesser extent, from the Persian Gulf.
ONGC typically exports 100,000 tons, or 746,000 barrel, of 0.5 % sulphur gas-oil and 72,000 tons, or 567,000 barrel,
of jet from its Mangalore refinery every month through semi-term contracts. Its existing contracts with European
trading houses Vitol and Glencore and Shell expired earlier.
