Saudi Aramco seals term prices for Jan-Jun 2012 naphtha at premiums of US$13-20/mt

16-Dec-11

Saudi Aramco has sealed term prices with its customers for the supply of naphtha over January-June 2012, as per Platts. It has fixed premiums for A180 naphtha from Yanbu and Ras Tanura at US$19/mt, treated naphtha from Rabigh at US$17/mt, chemical feed naphtha from Jubail at US$16.50/mt, A310 naphtha from Ras Tanura at US$20/mt and A310 naphtha from Jeddah at US$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. In April 2012, Aramco plans a 40-50 day maintenance, at its 200,000 bpd condensate splitter in Ras Tanura. As a result, less naphtha will be produced, specifically the A310 grade, leading to lower volumes offered for H1 2012, likely leading to the hike in premiums. 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 sealed premiums for A180 naphtha from Yanbu and Ras Tanura at US$17/mt, treated naphtha from Rabigh at US$16/mt, chemical feed naphtha from Jubail at US$15/mt, A310 naphtha from Ras Tanura at US$14/mt and A310 naphtha from Jeddah at US$12/mt -- all priced to Aramco's formula. This results in a year-on-year hike of US$1-6/mt for the company's term naphtha premiums.