India IOC to import gasoline to end-year -sources

In Freight News 04/08/2016

India’s biggest refiner Indian Oil Corp. will continue to import gasoline until at least December due to a heavy maintenance line-up and the slow start-up of a key unit at a new refinery, sources with direct knowledge of the matter said.

Asia-based traders of the fuel said they had expected IOC to stop importing gasoline and halt naphtha exports once a unit involved in the production of the motor fuel started up at the 300,000 barrel-per-day refinery in Paradip on India’s northeast coast.

IOC started up the Paradip plant last year and is still commissioning some units. In March it commissioned Paradip’s continuous catalytic reformer (CCR), which uses naphtha as a feedstock to produce reformate, a product used to make gasoline.

“The CCR was functional for a week (and) after that there was a problem with the compressor,” said one of the sources.

It is not clear when the CCR will start back up, and IOC did not respond to a request for comment.

The refiner – which has handled most of India’s gasoline imports in the surge of shipments that started in April of last year – has kept taking gasoline to fill the domestic supply gap, putting out a recent tender seeking up to 30,000 tonnes (255,000 barrels) of the fuel for an Aug. 5-7 delivery.

India’s overall gasoline imports hit a peak in May at 160,000 tonnes, highest since June 2015, before falling to 40,000 tonnes in June of this year, according to official data.

LITTLE IMPACT ON MARKET

India’s imported volumes, however, have not had a significant impact on the Asian market, because there have been ample supplies of gasoline since February this year due to high refinery throughput.

One result from the slow refinery start-up is that IOC started exporting naphtha from Paradip in January, starting with a small monthly volume of 17,000 to 19,000 tonnes.

The naphtha export volumes have since grown more than five-fold to about 107,000 tonnes for August loading, adding pressure on a market that is already oversupplied.

That has prompted Indian premiums on naphtha cargoes to flip to discounts and pulled spot prices on a cost-and-freight (C&F) basis to depths not seen in more than a year.

Indian state refiners – which control India’s retail oil market – typically buy fuel from private refiners Reliance Industries Ltd and Essar Oil or import them to meet their shortfalls.

India’s fuel demand has been surging over the past 1-1/2 year, driven by a growing appetite for gasoline-guzzling vehicles.

Disputes over the terms of purchase, however – such as which party will absorb sales tax and freight costs – often push the state refiners to look for overseas suppliers.

Potentially further boosting IOC’s imports of gasoline or other fuels is a long list of maintenance plans or work relating to fuel upgrades stretching from August to early 2017.

    (1 tonne gasoline = 8.5 barrels)
    
    Following is the tentative maintenance schedule of IOC in next few months.  
  
 Refinery           Unit           Capacity           Duration
 /Capacity (bpd)                   tonnes/yr          
 Panipat/300,000    HCU                      1.9 mln  13 days in Aug-9 Sept
                    DHDT                     3.5 mln  11  days in Sept-6 Oct
                    CDU-II                   7.5 mln   8 days in Sept
                    DCU                      3.0 mln  11 days in Sept-Oct 1
 Barauni/120,000    CRU                      300,000  10 days in Sept-Oct 12
                    RSU                      277,000  10 days in Sept-Oct 12
                    Isomerisation            126,000  8 days in Sept
                    NHDT                     183,000  8 days in Sept
                    CDU-II                  1.75 mln  10 days Sept-14 Oct
                    Coker A                  600,000  30 days each in Sept-Oct
 Koyali/274,000     CRU                      330,000  25 days Aug
                    CDU-I                    2.0 mln  12 days Jan/Feb
                    CDU-II                   2.2 mln  8 days Jan/Feb
                    CDU-III                  2.7 mln  24 days in Oct
                    HCU                      1.2 mln  4 days Sept-31 Oct
                    DHDS                     1.7 mln  22 day in 2016
                    VGO -HDT                 2.1 mln  25 days in Dec
                    DCU                      3.7 mln  25 days in Dec
 Mathura/160,000    CCRU                     466,000  5 days in Oct
                    FCCU                    1.32 mln  5 days in Oct
 Haldia/150,000     CRU                      216,000  10 days in July to Aug 15
                    DHDS                    1.49 mln  13 days from Aug 16
                    CDU-1                    3.4 mln  25 days in Nov/Dec
 Bongaigaon/47,000  DCU-2                    500,000  15 days in Aug
                    CRU                      160,000  15 days  in Aug
  
DCU        Delayed Coker Unit
DHDT       Diesel Hydrotreater
DHDS       Diesel Hydro Desulphuriser
HCU        Hydrocraker Unit
CRU        Catalytic Reformer Unit
NHDT       Naphtha Hydrotreater
FCCU       Fluid Catalytic Cracking Unit
VGO-HDT    Vaccum Gasoil Hydrotreater
RSU        Reformate Splitter Unit 
NHDT       Naphtha Hydrotreater

Source: Reuters (Reporting by Nidhi Verma, with additional reporting by Seng Li Peng in SINGAPORE; Editing by Tom Hogue)