Pertamina gets Saudi crude to replace Iraqi supply

State oil and gas company Pertamina has secured Saudi Arab Light barrels for May lifting to process at its 118,000 barrels per day (BPD) sour CDU at Cilacap after it was left dangling by the sudden halt in Iraqi crude exports since April 8, sources close to the company was quoted as saying by Platts on Thursday.

Pertamina's term Arab Light liftings under a contract to start in June have been brought forward to early May, they said. Pertamina was relying on spot Basrah Light imports for Cilacap in March-May. However, its suppliers declared force majeure on Basrah Light after April 8. Pertamina has a term contract with Saudi Arabia that fulfills its entire Cilacap sour crude needs. But following OPEC's successive output restraints since last year, Pertamina negotiated to accumulate the monthly Saudi crude lifting cuts to the end of the year.

As a result of this arrangement, Pertamina lifts its entire nominated monthly volumes of Arab Light through the term, but foregoes on full cargoes over a period towards the end of the term. The contract with Aramco, renewed on a yearly basis, runs from June to May. For the period of March-April, Pertamina had lifted two cargoes of spot Basrah Light for Cilacap before Iraq ceased exports. It subsequently made up for the shortfall by importing 2 million barrels Oman on a spot basis, sources said. The Oman cargoes are slated to arrive in end-April and the first week of May, they added. "But Aramco has agreed to accelerate Pertamina's cargo [under the new term contract starting June] to early May lifting," a source said. With this, "Cilacap's sour crude needs have been taken care of," he added.

Following the early-May Arab Light lifting, Pertamina would continue receiving its term supplies from Aramco under the renewed contract. Pertamina has renewed its term contract for Arab Light at 3.6 million barrels or two VLCCs per month, for a period of one more year from June, sources confirmed. Though Cilacap's 118,000 BPD sour CDU processes Basrah Light and Iranian Light as alternative grades, it achieves maximum efficiency with Arab Light, company officials have earlier said. The refinery has a 200,000 BPD sweet CDU that runs mostly on a cocktail of domestic crudes. (*)