India's state-owned Indian Oil Corp. has offered a rare volume of 38,000-40,000 mt naphtha for loading from Dahej on India's West Coast via a spot sell tender, Asian naphtha market participants said Monday.
IOC typically offers 35,000 mt of naphtha for loading from Dahej, with a plus/minus 5% buyers' option on volume.
The excess naphtha came from IOC's 13.7 million mt/year (275,150 b/d) Koyali refinery, located in India's western state of Gujarat, said sources. Naphtha produced from the Koyali refinery is usually channeled to IOC's Panipat petrochemical complex, but sources said that IOC could be exporting whatever excess naphtha they have in a bid to capitalize on current firm Asian naphtha prices.
"With the Asian naphtha market so strong, they could be sending whatever excess they have for export," one trader said.
"I can't recall the last time they had a bigger than normal volume ... I don't think they ever had one before," another trading source said Tuesday.
The odd-sized naphtha cargo sparked a flurry of interest among Asian naphtha participants, with talk largely centering around which vessel would be best able to accommodate the cargo, given that Dahej has size restrictions on vessels berthing.
"It's too big to fit on a standard Medium Range vessel, but too small for a Long Range vessel. Unless the LR does a co-load and is able to pick up another cargo from somewhere else," a trader said late Monday.
But naphtha traders and shipping sources said that while the draft at Dahej allows for Medium Range and Long Range vessels to berth there, the "berth is restricted by length."
"The draft is not a problem, it's the length over all, or LOA, that needs to be cleared," one trader said, adding that Dahej has a maximum LOA of 215 meters, but that most LR sized vessels have an LOA of over 220 meters, making it impossible for those vessels to berth at Dahej.
But some shipping sources said that there were a few "big MRs" or "smaller LR1 vessels" in the market that would be able to accommodate such an odd-sized cargo.
"The big MR vessels have a deadweight of around 51,000 mt, much like the normal MRs, but they have bigger [sized] cubic tanks which can take cargo sizes of up to 40,000 mt," a source said late Monday.
But with not many of these vessels around in the market, trade sources said the cargo would only be attractive to a limited group of buyers with access to the right vessels.
"Only those who can manage to take these sorts of vessels can maybe get the cargo at a good price, otherwise there's no vessel suitable for this volume," a trader said Tuesday.
