Kuwait seals term sale of jet fuel to Indonesia

Kuwait seals term sale of jet fuel to Indonesia

SINGAPORE (Reuter): State-owned Kuwait Petroleum Corp (KPC)
has sealed an annual term contract early this year to sell jet
fuel to Indonesia's national oil firm Pertamina, industry sources
said yesterday.

Under the deal, KPC supplies a 55,000-ton cargo of jet fuel
every 40 days, they said.

There was no clear indication on price terms, but one trade
source said the premium could be around 50 U.S. cents per barrel
to Singapore spot quotes, cost-and-freight (c-and-f), on a ship-
to-ship transfer basis.

KPC is already supplying jet fuel on term to a Singapore
refiner at a premium of 25-30 cents per barrel, c-and-f, on a
ship-to-ship transfer basis.

Kuwait has an ongoing term contract to supply about 80,000
tons per month of gas oil to Indonesia.

Traders said the new jet fuel deal underscored Indonesia's aim
to diversify its sources of middle-distillate supplies away from
Singapore by importing more from the Middle East and other
regional producers.

They said by diversifying its suppliers, Indonesia was seeking
more stable supplies and competitive prices, especially when the
market is jolted by emergencies such as refinery problems.

Indonesia started diversifying its sources early last year and
has since reduced gas oil imports from Singapore by more than 50
percent and jet-kerosene fuel by between 20 and 50 percent.

Traders noted that the jet fuel contract with KPC would
further reduce Indonesia's reliance on supplies from Singapore.

Indonesia normally buys about 500,000 barrels of jet-kerosene
fuel each month. The deal with KPC is translated to about 412,000
barrels.

But Indonesia has bought more jet fuel in February and March,
reaching over 1.5 million barrels each month, because of refinery
problems and higher demand amid the Haj pilgrimage season.