Saudi Aramco has sealed term prices with its customers for the supply of naphtha over January-June 2012, a trade source close to discussions said late Wednesday.
The Middle Eastern company has fixed premiums for A180 naphtha from Yanbu and Ras Tanura at $19/mt, treated naphtha from Rabigh at $17/mt, chemical feed naphtha from Jubail at $16.50/mt, A310 naphtha from Ras Tanura at $20/mt and A310 naphtha from Jeddah at $13/mt -- all priced to Aramco's formula which takes an average of CFR Japan naphtha assessments by Platts and Petroleum Argus, minus a freight component.
A310 naphtha from Ras Tanura is normally settled at a lower premium than A180 naphtha from Yanbu and Ras Tanura, as the latter is a light grade.
But a trade source said this week that Aramco's A310 naphtha "is a good grade as splitter naphtha, as it has heavy naphtha portion".
Another trade source, however, said Thursday that Aramco will be conducting a 40-50 day maintenance, starting April, at its 200,000 b/d condensate splitter in Ras Tanura.
"Less naphtha will be produced, specifically the A310 grade, so volumes offered are lower for H1 2012 and that's what probably added to the hike in premiums," the source said.
Meanwhile, A310 naphtha from Jeddah is also typically fixed at a lower premium as it is sold at a smaller lot size of 10,000-15,000 mt, compared with Aramco's other naphtha cargoes which are usually 50,000-55,000 mt.
For its January-June 2011 cycle, Saudi Aramco had inked premiums for A180 naphtha from Yanbu and Ras Tanura at $17/mt, treated naphtha from Rabigh at $16/mt, chemical feed naphtha from Jubail at $15/mt, A310 naphtha from Ras Tanura at $14/mt and A310 naphtha from Jeddah at $12/mt -- all priced to Aramco's formula.
This translates to a year-on-year hike of $1-6/mt for the company's term naphtha premiums.
