Reuters reported that India's Mangalore Refineries and Petrochemicals Limited is close to signing a deal to sell 1.32 million tonnes of oil products to Emirates National Oil Company from March to December of 2009.

MRPL, which depends heavily on Iran for crude purchases, last week said it will export diesel through spot tenders as its term deal to supply the fuel to Iran has not been renewed.

A trader source said that MRPL plans to supply 120,000 tonnes of jet fuel, 400,000 tonnes of gas oil with 1% sulphur content, and 800,000 tonnes of fuel oil. He added that the contracts for sale of the three products would run from March to December of 2009. Another trade source said this was the first time that MRPL would be selling fuel oil on a term basis to ENOC.

MRPL would sell jet fuel at a premium of USD 3.60 to USD 3.80 per barrel to the average of monthly Platts Middle East quotes for jet kerosene and gas oil at a premium of about USD 2.25 per barrel to average of monthly Platts gas oil regular quotes. The refiner would ship out ten 80,000 tonne fuel oil cargoes at a discount of USD 2.85 per tonne to the monthly average of Platts Singapore high sulphur fuel oil quotes.

MRPL plans to end fuel oil exports after expansion of its existing 194,000 barrels per day refinery in southern India to 300,000 barrels per day. The expansion, scheduled to be completed by March 2012, will change its crude and product slate and enable it to convert fuel oil into distillates like diesel and propylene. Post expansion, the refinery would be able to process cheaper and more acidic crudes. Currently 75 to 80% of the oil it processes is high sulphur crude.

(Sourced from Reuters)