PARCO oil refinery to restart this wk-trade

Pakistan’s 100,000 barrel-per-day (bpd) joint venture Pak Arab Refinery Ltd (PARCO), which was shut by severe floods, is on track to restart later this week, trading sources said on Tuesday.

This means that Pakistan State Oil (PSO) would need fewer product imports to plug the supply gap.

“The repairs to the refinery due to the flooding are more or less completed, and it should resume operations in the next two days or so,” said a trading source.

PARCO, 60 percent-owned by the Pakistan government and the remainder by the Emirate of Abu Dhabi through its Abu Dhabi Petroleum Investment Company (ADPI), was shut for two weeks because of the floods.

Due to the closure of the refinery — the country’s largest — PSO has bought two jet fuel cargoes totalling 35,000 tonnes, and up to three parcels of gasoline totalling 105,000 tonnes for September delivery.

The state oil firm is also seeking two 16,500-tonne lots of jet fuel per month for October and November via tender, with an option for a third cargo in November.

The tender will close on Wednesday, with bids remaining valid for another two days.

Pakistan’s imports, together with Indonesia state oil firm Pertamina’s spot purchases, have helped to underpin Asian jet fuel fundamentals in the last two weeks.

The country has sufficient gas oil inventories and has trimmed its gas oil imports from Kuwait Petroleum Corp (KPC) by 100,000 tonnes a month in August and September. Its average import volume from KPC is about 300,000 tonnes a month.

“PSO is on track to resume its normal import volumes for gas oil by mid-October,” said the trading source.

The floods have forced PSO to declared force majeure on two cargoes — a low-sulphur fuel oil lot and a gas oil parcel — both for August delivery, traders said.

KPC has been selling gas oil parcels diverted from Pakistan in the Middle East spot market over the last few weeks, putting pressure on diesel premiums, traders said.