The UAE's Abu Dhabi National Oil Co has offered to supply naphtha for 12 months starting February 2014 at premiums of USS$31/mt and $33/mt to the ADNOC formula, as per sources in Platts. The offers from ADNOC come on the back of preliminary term discussions that the Middle Eastern refiner held in Singapore over November 18-21 with its term customers. ADNOC sells three grades of naphtha and is offering paraffinic naphtha at a premium of US$33/mt, and the low sulfur and splitter naphtha grades at a premium of US$31/mt, all priced to the ADNOC formula. The ADNOC formula takes the average of FOB Arab Gulf naphtha assessments by Platts and Petroleum Argus.
Trade sources pointed out that most buyers would be looking for ADNOC to peg premiums at levels similar to term premium levels recently concluded by fellow Middle Eastern refiner, Kuwait Petroleum Corporation. In October, KPC agreed to supply light and full range naphtha for a 12-month period starting December 2013 at premiums of US$25.25/mt and US$24.25/mt, respectively, to the Mean of Platts Arab Gulf naphtha assessments. This is the second time that ADNOC has decided to sell its naphtha on a one-year basis starting in February. The refiner used to sell its term naphtha on a January-December cycle, but decided last year to push the cycle forward by a month. Reasons for the change could not be confirmed but traders had said earlier that it could be an opportunistic move by the refiner to leave more naphtha volumes available to sell on a spot basis during the peak naphtha demand months of December and January instead of tying up volumes on a fixed premium under term contracts.
ADNOC has two other 12-month long-term cycles, which used to be the April-March and July-June contracts. But last year, in line with the company's change to a February-January cycle, both cycles were pushed forward to May-April and August-July, respectively.
28-Nov-13 
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