Pakistan State Oil defers fuel oil tender again

Only one offer was received for LSFO; reasons for HSFO tender are unknown.

SINGAPORE: Pakistan State Oil (PSO) has extended the validity of a tender to buy low sulphur fuel oil (LSFO) after receiving only one offer, trade sources said.

The validity for LSFO cargoes has been extended to November 4, the sources said.

PSO was seeking up to 110,000 of LSFO and 455,000 tonnes of high sulphur fuel oil (HSFO), for delivery over November-January, via a tender that it issued earlier this month.

The tender closed on October 19 and offers were valid until October 26.

The company ended up buying five 65,000-ton cargoes of HSFO from Mercuria, Swiss Singapore and Bakri, but decided not to award the LSFO cargo as it only received one offer from Gunvor, according to the sources.

Gunvor was heard to place an offer for 55,000 tonnes of LSFO at a premium of $99.00 a ton to Middle East quotes, on a cost-and-freight (CFR) basis.

PSO skipped the purchase of LSFO in its previous tender in September due to sufficient stocks and as the company prepares to shift to winter-grade LSFO in November.

The company had extended the closing and validity dates of a term tender to buy fuel oil for a second time, a tender document showed on Tuesday.

PSO, which typically seeks supply through the spot market, in July issued the rare tender to import 2 million tons of HSFO over a 12-month period, and the tender was to close in August.

The company initially deferred the closing and validity dates to October 30 and November 30, respectively, to make changes to the terms of the tender.

“Certain terms like the credit period of six months is too long, and I think that deterred people from participating,” a trader said.

The reasons for the second deferment are not known.

The HSFO tender now is due to close on November 12, with offers to remain valid until December 31, the document showed.

Published in The Express Tribune, October 31^st, 2012.