The UAE's Abu Dhabi National Oil Co has concluded its term naphtha contracts for the July 2019 to June 2020 cycle at higher premiums, market sources said Tuesday.
The low sulfur naphtha from Ruwais West Refinery was inked at plus $16.0/mt to the ADNOC formula on an FOB basis, splitter grade naphtha at plus $17.0/mt, low sulfur naphtha from Ruwais refinery-East at plus $18.0/mt and paraffinic naphtha at plus $20.0/mt, market sources said.
All the naphtha grades were priced against the ADNOC formula, which takes the average of FOB Arab Gulf naphtha assessments by Platts and Petroleum Argus.
The final prices were reached shortly after two reductions from the initial offer, but several term lifters deemed the concluded levels were too high. Most of the term holders were said to have reduced their lifting volume for the cycle, according to a trade source.
ADNOC could not be reached immediately for comment.
In the previous year, for ADNOC's January-December 2019 term cycle, cargoes were inked at a premium of $13/mt for splitter naphtha and at plus $12/mt for low sulfur naphtha from Ruwais Refinery West, at plus $14/mt for low sulfur naphtha from Ruwais refinery-East and at plus $16/mt paraffinic naphtha.
ADNOC has two term naphtha cycles -- January-December and July-June.
Separately, fellow Middle Eastern supplier Kuwait Petroleum Corp., will commence negotiations this week for the renewal of August 2019-July 2020 cycle naphtha supply with its term customers.
High term prices concluded for ADNOC's contracts could potentially prompt buyers to seek competitive offers from KPC, market sources said.
Spot Long Range I naphtha cargoes loading 20-40 days forward within the Arab Gulf region were last assessed at plus $11.50/mt Monday to the Mean of Platts Arab Gulf naphtha assessment. - Platts-