Reuters: Mangalore Refineries and Petrochemicals Ltd will sell an extra 210,000 tonnes of diesel by December to Iran, which is boosting imports ahead of heavy refinery maintenance works this year, its managing director said on Tuesday.
By Nidhi Verma
NEW DELHI (Reuters) – Mangalore Refineries and Petrochemicals Ltd will sell an extra 210,000 tonnes of diesel by December to Iran, which is boosting imports ahead of heavy refinery maintenance works this year, its managing director said on Tuesday.
OPEC-member Iran has nearly doubled its imports of diesel, used for heating and power generation, to compensate for lost output ahead of shutdowns at its two largest oil refineries in the fourth quarter, traders have said.
The additional volumes would raise MRPL's diesel exports to Iran to 450,000 tonnes, R. Rajamani told Reuters.
In May, the company finalised its first-ever long term deal to sell 240,000 tonnes of diesel to Iran by sending a 30,000-tonne cargo every month until December, helping fill a void left after Reliance Industries halted sales last year.
"It is an extension of our existing deal, which is till December. We will be supplying 210,000 tonnes of diesel to Iran. The total deal size is now 450,000 tonnes," he said.
The refiner will supply additional diesel cargoes from this month onward, he added.
Despite its huge oil reserves, Iran is forced to import motor fuels due to a lack of production from its ageing refineries.
Iran will shut a 180,000 barrels per day (bpd) crude unit at its 450,000-bpd refinery in Abadan for 30-40 days from end- October.
It also plans to shut a 120,000-bpd vacuum distillation unit at its second largest refinery, the 270,000 bpd plant at Isfahan, for three weeks of maintenance from early-October. A number of secondary units will also be shut at Iran's refineries.
It was not clear if the additional volumes will also be sold at a premium of $4.35-$4.40 a tonne to Middle East quotes, levels agreed for the original supplies.
Dependence on expensive fuel imports is a sensitive issue for Tehran, which is facing the threat of more sanctions from the West over its nuclear programme.
A trade source said this was a clear indication that MRPL would not issue a spot diesel export tender. The firm last sold a spot diesel cargo in February.
MRPL annually imports around 150,000 bpd crude from Iran for use at its 194,000 bpd coastal refinery in Karnataka.