South Korean refiner S-Oil Corp has sold oil products worth $1.09bn to Saudi Aramco Products Trading Co, Reuters has reported.
The deal is the largest ever between the refiner and Aramco’s trading arm and comes after the Saudi giant increased its shares in the Korean refiner last month to 63.41% from 34.99%.
S-Oil will supply up to 14mn barrels of diesel, including ultra-low-sulphur diesel and low-sulphur diesel, and up to 14mn barrels of light naphtha under the contract valid between 1st of February and 31st of December 2015.
A S-Oil official said the deal was equivalent to 3.9% of the refiner’s total sales volumes in 2013. S-Oil buys almost all of its crude from Aramco but it used to sell most of its naphtha to Japan.Â
The company will receive 120,000 tonnes of paraxylene and 2mn barrels of heavy naphtha from Saudi Aramco Products Trading with output of both expected to drop due to maintenance shutdowns this year.
“This contract is seen to hike S-Oil’s domestic and overseas competitiveness as it will secure stable overseas sales markets and receive required raw materials via a subsidiary of the major shareholder Aramco,” S-Oil said.
