Jakarta to halve gas oil imports

Jakarta to halve gas oil imports

SINGAPORE (Reuters): Indonesia is expected to import around
four million barrels of gas oil for November, about half of the
volume purchased for October deliveries, industry sources said
here yesterday.

Traders said Indonesia was not expected to repeat its hefty 7-
8 million barrel purchase in October because of high domestic
stocks, the re-start of the bigger Cilacap crude unit in November
and higher import costs following the significant devaluation of
the rupiah against the U.S. dollar.

The sources said that Indonesia had already covered most of
its domestic requirements for November and its appetite for more
was limited.

State-owned oil company Pertamina will re-start the 200,000
barrel-per-day (bpd) crude unit in Cilacap in mid-November after
a month-long maintenance shut down.

The unit, whose capacity will be raised about 30,000-bpd
during the maintenance period, was originally expected to be down
for up to two or three months, sources said.

Aside from the earlier start-up of the unit, output from the
smaller crude unit at the Cilacap refinery was raised by 18,000-
bpd to 118,000-bpd during its maintenance earlier this month.

Traders said stocks in Indonesia are also high as a result of
the bumper purchase for October delivery. The amount purchased
was about 2-3 million more than its regular month imports.

"I think Indonesia might have over committed for October. I
don't think they have enough tank space for another round of big
purchases," one trader said.

He discounted earlier market talk that Indonesia might buy up
to seven million barrels for November delivery.

The industry sources said that Indonesia would take delivery
of two 80,000-ton cargoes from Kuwait as part of its term
contract.

They said it has also bought up to five 60,000-80,000 ton
cargoes from traders, some from Thailand and South Korea, for
delivery in November.

"I think they (Indonesia) will probably buy one more spot
cargo for Indonesia," a trader said.

Traders said Indonesia was also keeping its imports to a
minimum due to the depreciation of the rupiah against the U.S.
dollar.

The rupiah has lost more than 30 percent of its value against
the U.S. dollar since the start of July.