VITOL BUYS AGAIN LUCRATIVE OCTANE FROM UGD
On 29 November, on the platform of the Ukrainian Energy Exchange (UEE), Ukraine’s state owned vertically integrated PJSC Ukrgazvobycha (UGD) held electronic trading of oil products to be supplied for exports. Ukrgazdobycha (UGD) sold a record amount of petroleum products, including 140,000 t of benzene and reformate produced by the Shebelinka Gas refinery. The benzene and reformate volumes are penciled to be shipped by rail in the period from 1 March, 2018 till 28 February 2019.
The UGD offered 80,000 t of a benzene containing fraction with a discount of $70/t to the Platts, Naptha, FOB Rotterdam quotation and 60,000 t of reformate with a discount of $36/t to Argus, Evrobob oxy, NWE barges quotation.
Following the auction, the whole volume was purchased by one buyer, which trading sources indicated was Vitol. So benzene was sold at an increased discount of $90.5/t, and reformate with a reduced discount of $33/t.
As the OILMARKET learned from Ukrhazdobycha, the pricing was affected by the increase in the cost of domestic rail transportation, as well as the change in plans for the formation of railroad structures by Ukraine’s rail monopoly Ukrzaliznytsia.
"Previously, our products were exported via the Terekhovka-Khorobrychi border crossing in the Chernigov region, now the route has changed to Slovene-Berezhest in Kiev region, which extends the logistic. With increased transportation tariffs, the buyer's total costs increased additionally by $6/t. As a result, they were compensated by the auction price, "- the UGD head of sales and marketing Yuri Kuzmin explained, adding that the volumes would be shipped to the destinations in the Baltic area.
In February 2017 the state company sold 132,000t of benzene and reformate at $5.5-22.5/t more from the starting price. Benzene was sold on average with a discount of $74.5/t to Platts Naphtha quotations, and reformate at -$37.5/ t to Argus Eurobob. All cargoes then also were acquired by Vitol.
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