MOSCOW: Russia’s Rosneft agreed with Turkey’s Demiroren Group to extend its oil products supply to the Turkish company to 2018-2020, when it plans to double annual delivery from this year’s level, Rosneft said in a statement.
Under the new agreement, the two companies will sign an additional contract to supply up to 4.6 million metric ton (mt) in total in the course of the next three years, including 3.6 million metric ton of low sulfur diesel containing 10 ppm of sulfur, and up to 1 million metric ton of LPG, it said.
While Rosneft plans for roughly equal supply of about 1.533 million mt/year, or 30,800 b/d, the volumes may vary, the company’s spokesman said, adding that the agreement marked the maximum volume. It declined to give the minimum permitted volume.
The document, signed during Turkish President Recep Tayyip Erdogan’s visit to Moscow, is an extension of Rosneft’s previous deal with Demiroren for upto 840,000 mt of diesel supply this year, Rosneft said.
While the company said in December that it had agreed to supply 550,000 mt to the Turkish group this year, the volume was later reconsidered upwards, the spokesman said.
The new contract, which is yet to be signed, will allow Rosneft to “significantly strengthen its position in Turkey’s market, allowing the company to ensure supplies of additional 11.3% of the country’s diesel imports and about 6% of its diesel consumption,” Rosneft said in a statement.
The implementation of the agreement will allow Rosneft to supply more than half of Demiroren’s yearly oil product needs, it said.
Petrocas carries out oil products supply, trading and retail in the Caspian and Black Sea regions. It owns and manages a terminal in the port of Poti in Georgia, where oil products and petrochemicals are loaded, and also manages a network of filling stations in Georgia.
Additionally, Rosneft signed on Friday a cooperation agreement with Gas Enerji Sanayi ve Ticaret to supply 6 million mt/year of oil products, including those produced by Rosneft, to end-users in Turkey.
Rosneft sees Turkey as a prospective market as it imports nearly 35% of its oil product needs. Turkey’s oil product consumption grew 35% from 2005 to 2015 to 41.1 million mt, it said.
According to the latest data by Turkish energy regulator EPDK, Turkey imported 981,647 mt of diesel in December. Russia was the main source, accounting for 19% of the total imports.
