India IOC issues rare diesel buy tender to Kandla

SINGAPORE, June 15 (Reuters) State-run Indian Oil Corp. (IOC) has issued its first gas oil import tender to deliver a 0.05 percent sulphur cargo to the country's west coast this year, traders said on Thursday.

In the tender, scheduled to close on June 20, IOC seeks 30,000 tonnes of 500 parts per million (ppm) gas oil to be delivered into the northwestern port of Kandla during July 5-15.

Traders said it was unusual for India's largest state-run refiner to buy west coast-delivery gas oil cargoes, although they had been buying supplies for the eastern part of the country.

One trader said this was the first time that IOC had issued an import tender for delivery into Kandla this year, although it had bought two cargoes for east cost delivery in April.

Gas oil supplies from the Middle East, which is near the Indian west coast, has been thin because of the booming construction industry in the Gulf and rising power-sector demand for air-conditioning.

But Asia's supplies of low-sulphur gas oil have been rising, as most regional refineries with upgraded secondary units have been making more of the better-quality grade, making it more attractive to buy via India's east coast ports.

''I don't think they (IOC) will have problems finding supplies, because there are plenty of low sulphur materials,'' said a Singapore-based trader.

REUTERS CS SSC1343