Indonesia's state-owned Pertamina is seeking 5.4 million kiloliters of fatty acid methyl ester over 2014-2014 for gasoil blending through tender, company officials said late Thursday.
The tender, which is limited to domestic companies which participated in Pertamina's first FAME buy tender, is expected to be awarded in end-January, after closing earlier this week. First delivery is due by February 2014.
But while the contractual delivery timing is over a two-year period, potential sellers can offer supplies on a one-year basis, Pertamina?s senior vice president for fuel marketing and distribution Suhartoko told Platts.
"We offer the tender under a two-year period, but [sellers] can submit [offers] for only a year basis. We will prefer those who willing to meet our FAME needs for 2014 and 2015," he said.
The 5.4 million kl of FAME that Pertamina is seeking is part of the company's projected FAME demand of 6.6 million kl over 2014-2015.
Pertamina has already covered 1.2 million kl of this requirement via its first tender that was awarded at an undisclosed discount to the Mean of Platts Singapore 0.25% sulfur gasoil assessments on a CIF basis, with first deliveries in January 2014.
At that time, the volume awarded was sharply below the 6.6 million kl it sought in the tender as Pertamina considered most of the price offers submitted -- at premiums to MOPS 0.25% sulfur gasoil assessments -- as too high.
Meanwhile, Pertamina's FAME demand may be adjusted in 2015, as the figure depends on its yet-to-be-finalized subsidized gasoil quota for the year, Suhartoko said.
Indonesia launched biodiesel in 2008 in a bid to cut its fuel subsidy bill. The country had announced that it would implement a B10 biodiesel mandate -- diesel blended with 10% PME -- on September 1.
The move was to reduce the country's foreign exchange bill on gasoil imports and to absorb biodiesel exports. Indonesia estimated that the biodiesel mandate will reduce gasoil imports by 3.5 million kiloliters/year (60,313 b/d).
