February 11, 2010 / 2:25 PM / 8 years ago

Petronas ships gasoline from Reliance to Iran

* Petronas ships Reliance gasoline to Bandar Abbas

* Gasoline cargo was set to discharge on Tuesday

By Luke Pachymuthu

DUBAI, Feb 11 (Reuters) - Malaysia’s state oil firm Petronas [PETR.UL] is shipping a gasoline cargo produced by Reliance into Iran, despite the Indian refiner instructing traders not to supply its fuel to Tehran, trade sources said on Tuesday.

Reliance Industries (RELI.BO) stopped gasoline sales to Iran from its giant refining complex in May because of concern the United States could impose tougher sanctions on fuel suppliers to the Islamic Republic.

Earlier this week President Barack Obama said a new push toward international sanctions against Iran was moving fast and should be completed in the next few weeks.

Iran’s gasoline imports have become a target for U.S. legislators looking to put pressure on Tehran to halt its nuclear programme. The U.S. and its allies suspect Iran may be using the programme to develop weapons, which Tehran denies.

To shield itself from potential punitive measures by the United States, Reliance has included a clause in its fuel sales contract which restricts those buying its gasoline from then shipping the cargoes onto Iran.

Petronas would be the second firm that shipping data obtained by Reuters has shown ignoring Reliance’s destination restriction. Shipping data showed Kuwait’s fuel supplier IPG making similar deliveries last year. [ID:nLF125050]

The shipping data showed that Petronas loaded the oil tanker Oriental Ruby, with a 250,000 barrel cargo of gasoline on Friday from Reliance’s terminal at Sikka. The vessel was scheduled to discharge at Iran’s Bandar Abbas oil terminal on Tuesday, the data showed.

PETRONAS COMMENT

Petronas declined comment on this specific gasoline cargo but said it did supply gasoline to Iran.

“Petronas, through subsidiary Petronas Trading Corporation (Petco), sells gasoline sourced from third-party traders to Iran and other markets in transactions that are in adherence to all relevant and applicable laws,” a company spokesperson told Reuters via e-mail.

Petronas could have bought the Reliance gasoline cargo through another trader, one industry source said. If that were the case, the second contract may not have included in the exclusion clause.

Earlier this week, Reliance confirmed that it ceased fuel supplies to Iran last May and that its contracts with buyers explicitly prohibited Iran as a destination for any cargo loaded at its terminal. [ID:sSGE6180JX]

“Our gasoline export contracts with the buyers explicitly prohibits Iran as a destination. No other refiner in the region, that we know of, puts any restriction to sell to Iran like us,” a Reliance company spokesperson told Reuters.

“We expect our buyers to honor their contractual commitment and we are not aware of any breach of the same.”

Petronas has been selling on average about 16,000 barrels per day (bpd) of the motor fuel monthly to Iran since the fourth-quarter of 2009, traders said.

State-owned Asian energy firms are less susceptible to U.S. political pressure to halt business dealings with Iran than international oil firms. Energy-hungry Chinese and Indian state firms have continued to seek deals in Iran, while Western companies have delayed investment.

Iran planned to purchase up to 153,000 bpd of gasoline from the international spot market in February, traders said.

Iran has the world’s third biggest oil reserves, but it must still import 40 percent of its gasoline to meet domestic demand because of a lack of refining capacity.

Petronas has increased its trading activity in the Gulf over the past six months, and has secured about 500,000 barrels of fuel storage at the port of Fujairah in the United Arab Emirates. Storage helps to increase the flexibility of trading firms as they look to cash in on oil price changes.

Additional reporting by David Chance in Kuala Lumpur and Nidhi Verma in New Delhi; Editing by Simon Webb and William Hardy

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