HPCL issues rare tender for low-sulphur stock

Singapore, Nov 16: India's Hindustan Petroleum Corp. Ltd. (HPCL) has issued a rare import tender for 25,000-30,000 tonnes of low-sulphur heavy stock (LSHS) and one tonne of fuel oil for December delivery, traders said on Thursday.

The 600-1,000 centistoke (cst) LSHS parcel, of 1 percent sulphur content and 0.93-0.98 density, and the 180-cst fuel oil lot, of 4 percent sulphur, are for Dec. 17-19 delivery to Chennai on a cost-and-freight (C&F) basis.

The tender closes on Friday and will remain valid till Nov. 21.

Traders said the LSHS parcel is typically used as burning fuel by utilities, much like the more common low-sulphur waxy residue (LSWR) from Indonesia.

''HPCL typically supplies these materials to small domestic utilities. The fact that they are looking for it would suggest that they are short,'' said a Mumbai-based Western trader adding that was not unexpected as they had been selling large volumes of fuel oil in the last two months.

HPCL sold 60,000 tonnes of November-loading fuel oil and another 105,000 tonnes for October loading, compared to none for both months in 2005, Reuters data show.

The refiner, which has sold 455,000 tonnes this year versus 30,000 tonnes in 2005, has yet to offer any December-loading parcels.

The heavier volumes are in line with Indian refiners stepping up fuel oil exports this year, with year-to-date annual volumes at 3.13 million tonnes, well above last year's total of 1.83 million tonnes.

Traders said the seemingly odd request for one-tonne of 180-cst is for flushing remnants of the high-pour, high viscosity LSHS from the line connects the discharging tanker to the receiving storage tanks.

Reuters