The Hindu Business Line : SCI to import additional crude for BPCL

Shipping Corporation of India is to import an additional one mt of crude for Bharat Petroleum Corporation under the new Contract of Affreightment (CoA) being finalised between the two public sector companies for 2006-07 (October-September). Starting October this year, according to the contract, SCI will begin transporting imported crude for BPCL from various international sources and will complete with a total throughput of six million tonnes (mt) by September next year. The CoA for 2005-06 provided for a total import of five mt between October 2005 and September 2006.

The sources of supply for 2006-07 are yet to be identified because it is rather early for BPCL to firm up them. It could be anywhere in the world including spot purchases. In the current year so far, sources were mostly located in West Asia. There has been no spot purchase so far.

The negotiations with Hindustan Petroleum Corporation for a new CoA for 2006-07 too will begin shortly, according to informed sources. The tenure of the present CoA with HPCL too will expire in September 2006.

Under the present CoA, SCI is to complete transporting 7.5 mt of crude by September 2006. Whether HPCL will sign CoA for larger imports in 2006-07 will depend on its projected crude requirement, which in turn will be determined by the refinery capacity.

SCI also has CoA with IOC, the biggest of three public sector oil refining and marketing companies. But its nature is slightly different. Unlike HPCL and BPCL whose CoAs are finalised through negotiations, the one with IOC is reached through the tender process.

Also, the CoA with IOC is for transportation of crude by VLCCs (very large crude carriers) whereas, Aframax and Suexmax tankers are generally used for transporting crude for the two other companies. SCI's present CoA with IOC for transporting nine mt will be in force till the end of this year.

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