TEHRAN: Indonesia’s state-run Pertamina will start discussions with National Iranian Oil Company, or NIOC, this week for the renewal of their term LPG import contract for 2018 supplies, a source familiar with the matter said.
They will review volumes as well as price levels. Pertamina has had a contract since May last year with NIOC for a total 600,000 mt of LPG to be delivered over 2016-2017 in 14 cargoes.
The first 44,000 mt evenly split propane/butane parcel was delivered in October 2016.
Pertamina, which has been receiving one or two cargoes a month, last took delivery of a 44,000 mt propane cargo on the VLGC Pertamina Gas 2 from Assaluyeh, shipping sources said.
Another VLGC, Pertamina Gas 1, is also used to lift cargoes from the Assaluyeh terminal in South Pars, according to S&P Global Platts trade flow software cFlow.
Pertamina would normally prefer an evenly split cargo, but it is up to NIOC to allocate the parcel split depending on availability and timing. This could include a cargo comprising 33,000 mt propane and 11,000 mt butane, or vice versa, according to sources.
For its 2016-2017 government-to-government contract, Indonesia had sought a discount of between $15/mt and $20/mt to the Saudi Aramco contract price on an FOB basis, according to sources.
Deep discounts were given during the period of Western sanctions on Iranian oil and gas, which ended in January 2016. But FOB discounts offered by Iran to Asian buyers, such as China, steadily narrowed to single digits after the lifting of sanctions.
Traders said Pertamina recently awarded a term supply tender to four international trading firms — Japan’s Gyxis, Spain’s Vilma, French Total and Anglo-Dutch Shell — for the monthly delivery of four to six evenly split cargoes of 44,000 mt each over January-December 2018.
Prices were at premiums to the Saudi CP of between $9/mt and $16/mt CFR basis to Tanjung Uban, Teluk Semangka or Kalbut, trade sources said.
