South Korea's S-Oil finalizes 2013 term contract for ultra low sulfur diesel

South Korea’s S-Oil has finalized a term contract for 2013 with 10 buyers for its ultra low sulfur diesel. The sale involves a total volume of about 900,000 to 1.2 million barrels per month of the 10 parts per million (ppm) sulfur diesel cargoes at a premium price of about US$1.10 per barrel above the 500 ppm sulfur gasoil Singapore benchmark quotes.
In 2012, S-Oil had sold the 10 ppm sulfur gasoil at a premium of US$2.30 to US$2.40 a barrel to the current benchmark Singapore quotes. The company normally prices its cargoes off the 5,000 ppm sulfur gasoil price, but this time, it will change its formula to reflect the cleaner 500 ppm sulfur gasoil quotes.
Starting in 2013, price agency Platts, a unit of McGraw-Hill, will lower the sulfur specification of its benchmark gasoil assessment in Singapore and the Middle East from 5,000 ppm to 500 ppm. This is to keep up with global changes, especially in regions like Europe, which have adopted the Euro V fuel specifications, the company said. (December 3, 2012)