Singapore, July 07: Saudi Arabia, the world’s top oil exporter, will slash gasoline imports by 40 percent in July as new domestic production capacity comes online, traders said yesterday. The world’s top oil exporter is expected to import around 34,100 barrels per day (bpd) of the motor fuel in July, because of the start-up of a gasoline production unit at its $10.3 billion Rabigh Refining and Petrochemical Co.
Saudi Arabia typically imports between 60,000 to 70,000 bpd of gasoline monthly. “It looks like they are buying about four cargoes for July, we don’t see any other indication to suggest they will be buying more than this,” an Asia-based trader said. “At least as we understand it has to do with a boost in production expected from Rabigh.
PetroRabigh, an export-oriented joint venture between state oil giant Saudi Aramco and Japan’s Sumitomo Chemical, will have the capacity to produce up to 60,000 bpd of high octane gasoline that will be converted from fuel oil. PetroRabigh started partial operation of its plant in the fourth-quarter of 2008. The kingdom’s gasoline imports are expected to drop about 15,000 bpd this year, energy consultancy PFC Energy said.
Gasoline demand in the Gulf Arab state jumped to a historic peak of nearly 400,000 bpd in April, up six percent when compared to the same period last year, PFC Energy said in a report. Imports had also jumped between February and May due to scheduled and unplanned refinery maintenance. Imports eased off in June following the end of maintenance, with shipments pegged at around 57,000 bpd.
Going forward we are expecting to see lower import requirements from Saudi Arabia, closing off another important demand outlet for the market” a trader said. “The new unit to come online at Rabigh is supposed to make them self-sufficient…but still early to say if that means a complete import freeze.” Middle East gasoline prices were pegged at around a $4 a barrel premium in the week ended July 3, down nearly $3 from the previous week.
–Agencies–