Friday, September 24, 2021

Lebanon takes first gasoil cargo under Iraq supply deal 

Lebanon has received a first cargo of gasoil under a fuel supply deal struck with Iraq in late-July to help alleviate a growing fuel-supply crisis in the cash-strapped state.

The tanker laden with 31,000t (231,000 bl) of gasoil began to discharge on 17 September in Lebanon, according to Lebanon's ministry of energy and water. 15,000t of the fuel was unloaded into the tanks of Lebanon's Deir Ammar power plant in the north on that day, with the remaining 16,000t unloading yesterday at the Zahrani plant in the south.

The energy ministry did not give the name of the vessel. But the Kriti Episkopi, which according to Vortexa loaded 32,200t of gasoil from Georgia, departed on 6 September and arrived at Deir Ammar on 17 September, is likely that tanker. Vortexa shows the vessel now moored off the Zahrani power plant.

According to the ministry, the gasoil cargo began to unload after Lebanon's General Directorate of Oil and the concerned monitoring companies validated the conformity of the gasoil specifications. Argus has not yet been able to confirm the specifications of the gasoil typically used at the Deir Ammar plant, but the Zahrani plant normally takes gasoil with a maximum sulphur content of 0.2pc.

Under the supply deal signed with Iraq, the Lebanese government will buy and resell 1mn t of heavy fuel oil from Iraq through monthly spot tenders - in cargoes of 75,000-85,000t - for one year on behalf of Lebanon's main power provider Electricite du Liban (EDL). Lebanon said the deal should cover around one third of EDL's annual fuel needs, therefore tying the country over for around four months.

This first cargo came as part of a tender that was awarded to Dubai's state-owned Enoc in late August to swap 84,000t (542,000 bl) of Iraqi fuel oil with 30,000t of a specific grade of fuel and 33,000t (246,000 bl) of gasoil for use at Lebanon's power plants. Market sources said Lebanon has awarded its second tender under this scheme, again to Enoc, to swap the same amount and products, but this could not be confirmed.

Lebanon's energy ministry said a "Grade B" fuel oil vessel will arrive in Lebanon before the end of September.

Separately, the energy ministry issued a spot tender on 17 September to buy a total of 60,000t 10ppm sulphur gasoil to be delivered to the oil installations in Tripoli and Zahrani on a DAP basis. According to the tender, the product should be delivered into two equal lots, one for 10-15 October delivery and another for 20-25 October delivery. Offers must be submitted by 27 September and 5 October, respectively.

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