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Mon 14 Feb 2011 03:28 PM

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ADNOC offers Apr 2011-Mar 2012 naphtha at lower premiums

ADNOC's customers include Japan's Marubeni, Mitsubiship; South Korea's Honam, Samsung Total

ADNOC offers Apr 2011-Mar 2012 naphtha at lower premiums
CHEMICAL TALKS ADNOCs customers are expected to reply to the offers on February 16 (Bloomberg Images)

UAE' Abu Dhabi National Oil Company (ADNOC) has pegged its offers for three naphtha grades lifting in April 2011 to March 2012 at lower premiums versus a year ago, traders said on Monday.

This would likely set the stage for Kuwait Petroleum Corp (KPC) who is currently holding its term talks for the same lifting period in Singapore.

"We were expecting ADNOC to announce its offers after KPC comes up with some indications, which was often the case. But it seems like ADNOC is ahead this time," said a trader.

Pentane grade was offered at $21.00 a tonne premium to ADNOC's own price formula on a free-on-board (FOB) basis.

Low-sulphur grade was quoted at $20.00 a tonne premium and splitter naphtha at plus $19.00 a tonne to the same formula.

These were lower compared to April 2010 to March 2011 delivery at $23.50-$25.50 a tonne premiums to the same formula. However, the latest offers are about 13.5-15 percent higher than January-December 2011 contract premiums at $16.50-$18.50 a tonne on a FOB basis.

"The offers for April 2011 to March 2012 were not very far from what we were expecting. But whether or not there will be brisk acceptance remains to be seen," the trader said.

ADNOC's customers include Japan's Marubeni, Mitsubishi Corp, South Korea's Honam Petrochemical and Samsung Total and Taiwan's CPC. They are expected to reply to the offers on February 16.

"Although the current offers are lower than last year's April train, a more reasonable price would be around the mid-teen levels," said another trader.

"You have to take into account the heavy cracker turnaround season (in second-quarter and third quarter)."

Cracks, the premiums/losses obtained from refining Brent crude into naphtha, fell by almost 39 percent to $114.38 a tonne on Friday from a nearly three-year high on January 5 at $186.50 a tonne premium.

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