Reliance offers first 0.005 pct term diesel

By Nidhi Verma

NEW DELHI (Reuters) - India's Reliance Industries offered for the first time term supplies of 0.005 percent sulphur diesel for July 2008 to June 2009 lifting, aiming to seal contracts before its new refinery comes on line, trade sources said on Tuesday.

Reliance did not specify the total volumes on offer for the ultra-low sulphur grade supply, except for the cargo sizes of 40,000-60,000 tonnes each, said one trader who has been invited for negotiations.

Reliance has sold a few cargoes of ultra-low sulphur diesel of similar size via spot tenders before this, the trader added.

Reliance, which is targeting new markets and strengthening its foothold in existing ones, has offered flexible cargo sizes on a free-on-board basis ex-Jamnagar in Gujarat.

"They are offering flexible quantities... 40,000-60,000 tonnes cargo size. Going by the specification, it seems Reliance wants to sell its product in the European market," one trader said, adding the tender may be awarded some time next week.

Reliance recently awarded a year-long term tender to sell 0.05 percent sulphur diesel at a premium of around $6 a tonne to Middle East Gulf quotes.

Reliance's new 580,000 barrels per day (bpd) complex in the Jamnagar district will begin trial runs from July and is slated for commissioning in September, taking the refiner's total refining capacity to 1.24 million bpd.

The new refinery's process configuration was designed to maximise gasoline, alkylate, jet fuel and diesel output, as well as other premium products such as 0.1 percent sulphur gasoline and diesel. The production of residual fuel will be limited.