Sri Lanka seeks WTI Midland crude for first time

Sri Lanka's state-controlled refiner Ceypetco has issued its first tender to buy US light sweet WTI Midland crude.

The spot tender sought 700,000 bl of WTI Midland crude for delivery to Colombo port over 21-25 December on a delivered at port basis. The tender closes on 8 October with bids valid for three days.

Ceypetco is currently running only Abu Dhabi light sour Murban crude at its 50,000 b/d Kelaniya refinery near the capital Colombo, although the refinery has taken small volumes of medium sour Oman and light sweet Algerian Saharan Blend in the past. Ceypetco typically imports 20 cargoes of Murban a year, each of about 700,000 bl.

Ceypetco's US crude purchase tender coincides with a rise in Murban crude prices. Premiums for Murban leapt to six-year highs following the 14 September attacks on Saudi Arabian oil infrastructure that shut in 5.7mn b/d of crude output. Saudi Arabia has since said half of crude output knocked out by attacks has been restored and it will fulfil all crude export obligations. But concerns that prompt supplies could tighten continue to support prices.

Ceypetco is also exploring alternative grades in a bid to diversify supplies. Ceypetco aims to replace the ageing Kelaniya refinery with a 200,000 b/d refinery near Sri Lanka's Hambantota port that is targeting a 2022 start-up.