February 23, 2011 at 11:44 pm #2369
Asia Gasoline-Formosa sells over 1 mln tonnes gasoline, alkylate
Reuters – Friday, February 18
SINGAPORE, Feb 17, 2011 – Taiwan’s Formosa has sealed a term deal to sell over 1 million tonnes of gasoline and alkylate for April 2011 to March 2012 loading to seven buyers, traders said on Thursday.
The buyers will each lift around 30,000 tonnes of either 92-octane at 45 cents a barrel premium to Singapore quotes on a free-on-board basis, or 93-octane at 75 cents a barrel premium to the same formula.
This works out to a total of about 210,000 tonnes of gasoline per quarter on a term basis. Formosa on average exports around 210,000-240,000 tonnes of gasoline a month on a term and spot basis.
Three of the seven buyers will also lift an alkylate cargo each every quarter from April 2011 to March 2012 at premiums of $8.50 a barrel to Singapore quotes on a FOB basis.
One of three Formosa’s crude distillation units at its 540,000 barrel-per-day refinery is scheduled for maintenance in March. During the time, its operating rates will be slashed to around 56 percent of its total capacity
February 23, 2011 at 11:51 pm #5246
The Alkylate premium seems inline as post blend octane component – but it could have lot higher value if it was blended in the whole refinery blend pool instead of afterward as octane booster (think todays LP predict alky synergy that they didnt in past which was mostly trial & error basis).
Formosa is probably able to do this because lot of gasoline components go to integrated chemical plant as domestic feedstock instead of having to try export as finished gasoline (even though it appears they have the option) which frees up akylate as premium sales product?
As past Refinery Intermediate feedstock trader it looks like there might be opportunity for US plants using Akylate as blend component for US gasoline (depending on freight cost). Although it still runs into an age old problem of backing out crude barrels. But …. during summer need for peak volumes gasoline & currnet crude prices at fear spiked values which yield low margins – it has good chance.
This may not be ongoing basis even though its listed as term – but since Formosa refinery is inside a Petrochemical plant odds are it could be stable opportunity.
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