ONGC sells March naphtha at higher premium

SINGAPORE, Feb 5 (Reuters) Oil and Natural Gas Corp. (ONGC) has awarded a tender to sell two 35,000-tonne naphtha cargoes for loading in March at higher premiums than its last sale, a trading source said on Monday.

Details of the tender award are as follows: TONNE LOADING/PORT BUYER PRICE(FOB/T) 35,000 March 7-8/Hazira Petrodiamond ME+.60 35,000 March 20-21/Hazira Petrodiamond ME+.30 Note: FOB is a free-on-board basis and ME is benchmark Middle East spot quotes. Hazira is a west coast port.

In the previous tender, ONGC awarded two 35,000-tonne naphtha cargoes for loading from Hazira in the first half of February. The price paid for the cargoes exceeded a tonne premiums to Middle East spot quotes, FOB.

The Asian petrochemical feedstock market has picked up sharply this year, as Indian exports have fallen back below 500,000 tonnes for February and March loadings against last year's average monthly shipments of about 520,000 tonnes.

Asian naphtha demand also has increased due to expanded naphtha-consuming units and less cracker turnarounds than last year, while petrochemical makers have been running their crackers at high rates thanks to strong petrochemical margins.

The Brent/naphtha crack -- the premium paid for naphtha versus Brent crude -- hit a three-year high in late January.

Naphtha is the feedstock used to produce ethylene and propylene, the basic building blocks for the chemical sector.

REUTERS CS ND1152