Kuwait Petroleum Corp. (KPC) will provide its full-range naphtha to load $16 a tonne premium to the Middle East on a free-on-board basis from December 2019 to November 2020, sources told Reuters.
The company is currently negotiating the offer in Singapore with Japanese and South Korean companies.
It is worth noting that KPC has three 12-month naphtha contracts with Asian buyers, where one was held in April, the other in August and the third is expected to be in December.
The deal is 18.5% higher than an older contract that ends in November 2019, with a rate of $13.50 a tonne.
The company is also offering its light grade naphtha at a premium of $17.50 a tonne for the December 2019 to November 2020, also $2.50 a tonne higher than the prior year, the sources added.
Naphtha had the lowest profit margins for refiners among diesel, gasoline, jet fuel and fuel oil. Nonetheless, after Aramco’s attacks, naphtha premiums rose to their highest since H1 2018.