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.