Saigon Petro has issued its first ever semi-term tender to import up to 13,200 mt of pressurized LPG for delivery over July to December this year, an industry source said Monday.
The Vietnamese state-owned company, which normally buys via monthly spot tenders, is seeking term supplies as it had paid premiums in the highs of above $100s/mt last year for monthly spot cargoes and was trying to see if it could obtain lower premiums through the term tender this year, the source said.
It is seeking two cargoes of 1,100 mt each to be delivered each month over the six-month period. The cargoes should comprise 30-60% of propane and the rest butane for delivery over 5th to 7th and 15th to 17th of each month, CFR Catlai basis.
The tender closes May 13 and is valid until May 15.
Saigon Petro has also issued a spot tender seeking two 900-mt lots of similar specifications for delivery into Catlai over June 16-18 and June 24-26, CFR Catlai. The spot tender closes May 7 and is valid until May 8.
The pricing for the two tenders are based on Saudi Aramco's Contract Prices for propane and butane.
The company last bought via spot tender one 1,100 mt-parcel of similar specifications for delivery into Catlai over May 20-22, at a premium near $80/mt to Saudi Aramco's May Contract Prices for propane and butane, CFR Catlai. The cargo was bought from a foreign supplier, a trade source said.
Since last December, the company paid premiums of between the high $70s/mt and more than $80/mt to the Saudi CPs.
But for cargoes delivered between June and October last year, premiums were more than $100/mt, peaking to around $140/mt premium for a first-half August delivery cargo.
The company buys from international traders or local suppliers and some of its purchases have also been re-exported to neighboring Cambodia.
Saigon Petro operates the Catlai LPG plant at Ho Chi Minh City, with a storage capacity of more than 3,000 mt and a filling system with a working capacity of over 40,000 mt/year, it said on its website.
Other than Saigon Petro, state-owned PetroVietnam's gas unit PV Gas also issues term tenders. Earlier this year, PV Gas bought via tender up to 24,000 mt of pressurized LPG -- in parcels of between of 1,800 mt/month and 2,000 mt/month for delivery over April 2013 to March-2014 -- from South Korean trader E1 Corp. and Japan's Itochu.
The premium for the annual term tender was around $70/mt to the Saudi Aramco CPs, CFR basis, a market source said. Its previous 2012-2013 contract for 72,000 mt of supplies was awarded to two Asian traders at a premium in the high $70s/mt to Saudi Aramco CPs.
PV Gas last month opened the 60,000 mt LPG storage facility at the Thi Vai LPG terminal in Ba Ria-Vung Tau province. The $120 million facility, which will store refrigerated LPG for PV Gas and other gas importers, will triple Vietnam's total gas storage capacity to 90,000 mt from around 31,000 mt, the company had said.
