Essar Oil awards Aug-Oct diesel term contract to Noble Group

NEW DELHI/SINGAPORE (Reuters) - Essar Oil has awarded a rare term contract to export up to 210,000 tonnes of diesel for August to October loading to trader Noble Group , industry sources said on Monday.

Essar Oil has sold up to 70,000 tonnes a month of 500 ppm sulphur diesel for loading from Vadinar over August to October to Noble at a premium of between $2.30 and $2.40 a barrel above Middle East quotes, one of the sources said.

Noble is likely shipping the cargoes to Saudi Arabia, trade sources said, though this could not be confirmed.

While Essar Oil started exporting diesel regularly in the spot market from September last year following a two-year hiatus after upgrades to its refinery boosted diesel supply, it has rarely offered diesel term cargoes for export, industry sources said.

 

Essar Oil completed an upgrade to its refinery in June last year, raising its capacity to 405,000 barrels a day, accounting for about 9 percent of India's refining capacity, and also raising the unit's complexity to handle cheaper, heavier grades.

The refinery produces about 9 million to 10 million tonnes of diesel a year and is able to produce Euro-V compliant fuel. (Reporting by Nidhi Verma in NEW DELHI in Jessica Jaganathan in SINGAPORE; Editing by Muralikumar Anantharaman)