Taiwan's Formosa Petrochemicals has bought 1 million barrels of spot medium sour Oman crude for loading in June for the first time in nine months since a fire hit its 540,000 b/d Mailiao refinery July 25, industry sources said Tuesday.
The privately-owned refiner was heard to have bought two cargoes of Oman crude, each of 500,000 barrels, at Platts front-month Dubai crude assessment plus $1.20/barrel, sources said. Formosa's purchase was meant as a top-up to existing term cargoes from the Middle East to fill a VLCC so it does not pay freight for unused space on the vessel, a source said. Formosa has term contracts with Saudi Aramco, Kuwait, Abu Dhabi's ADNOC and Iran's NIOC.
The purchase does not signal the impending restart of its fire-hit 80,500 b/d No. 2 residue desulfurizer and 180,000 b/d crude distillation unit. Both units are expected to restart in the fourth quarter.
Formosa has not been buying spot sour crude since the shutdown of its No. 2 RDS, but continues to lift term sour crude cargoes from the Middle East.
The refiner last August resold 2 million barrels of prompt August-loading spot Oman crude to Japanese trader Itochu in the immediate aftermath of the refinery fire. Spot differentials of Oman crude have fallen to under $1/barrel premium to Dubai crude as weakening fuel oil cracks dampened the demand for the crude.
