Kuwait Petroleum Corporation, or KPC, has agreed to supply fuel to Bangladesh using vessels which are less than 20 years old -- overturning an earlier policy where it used vessels up to 25 years old -- following a meeting in Kuwait with Bangladesh Petroleum Corporation, a senior Bangladesh government official said Thursday.
"KPC has agreed to our proposal and will supply fuel with vessels as per our requirement from the next calendar year," a BPC official said.
Calls to a KPC manager for comment went unanswered at mid-day Thursday.
Bangladesh had earlier asked BPC to stop importing petroleum products using vessels more than 20 years old from 2011 in line with the International Maritime Organization specifications. But KPC had lobbied to be allowed to continue supplying fuel to Bangladesh using vessels up to 25 years old and offered to cut fuel premiums if allowed to do so.
Bangladesh was forced by Kuwait to relax its regulations on allowing the use of vessels more than 20 years old to supply fuel in 2009 as KPC had told BPC that it would charge higher premiums and reject letters of credit from Bangladesh's state-owned commercial banks if it failed to accept the condition.
Separately, KPC was forced to take back at least two consignments of jet fuel of 10,000 mt each late last year as the fuel was found to be substandard. It subsequently replaced the two cargoes.
As of now, BPC has a deal with the KPC under which the company is to provide 520,000 mt of gasoil at a premium of $3.40/barrel to the Mean of Platts Arab Gulf assessment and 140,000 mt of jet fuel at a premium of $4.40/b to MOPAG over July-December 2010.
Kuwait has been supplying gasoil and jet fuel to Bangladesh under term contracts since 2003, meeting virtually all the country's annual demand. But the arrangement foundered in 2008 when Kuwait imposed more conditions on letters of credit and suspended the shipment of eight cargoes prompting BPC to look for new sources.
BPC now imports petroleum form Kuwait's KPC, Malaysia's Petco, Philippines' PNOC, Maldives' MNOC and Egypt's Midor.
BPC is projected to raise its annual oil imports by over 33% to 4.85 million mt/year next year from 3.70 million mt/year as the country moves to tackle a power crisis by building dozens of new gasoil- and fuel oil-fired power plants.
Meanwhile, BPC is moving to raise its subsidiary Eastern Refinery Limited's refining capacity to 4.5 million mt/year from 1.5 million mt/year to meet the soaring oil demand
"KPC has agreed to our proposal and will supply fuel with vessels as per our requirement from the next calendar year," a BPC official said.
Calls to a KPC manager for comment went unanswered at mid-day Thursday.
Bangladesh had earlier asked BPC to stop importing petroleum products using vessels more than 20 years old from 2011 in line with the International Maritime Organization specifications. But KPC had lobbied to be allowed to continue supplying fuel to Bangladesh using vessels up to 25 years old and offered to cut fuel premiums if allowed to do so.
Bangladesh was forced by Kuwait to relax its regulations on allowing the use of vessels more than 20 years old to supply fuel in 2009 as KPC had told BPC that it would charge higher premiums and reject letters of credit from Bangladesh's state-owned commercial banks if it failed to accept the condition.
Separately, KPC was forced to take back at least two consignments of jet fuel of 10,000 mt each late last year as the fuel was found to be substandard. It subsequently replaced the two cargoes.
As of now, BPC has a deal with the KPC under which the company is to provide 520,000 mt of gasoil at a premium of $3.40/barrel to the Mean of Platts Arab Gulf assessment and 140,000 mt of jet fuel at a premium of $4.40/b to MOPAG over July-December 2010.
Kuwait has been supplying gasoil and jet fuel to Bangladesh under term contracts since 2003, meeting virtually all the country's annual demand. But the arrangement foundered in 2008 when Kuwait imposed more conditions on letters of credit and suspended the shipment of eight cargoes prompting BPC to look for new sources.
BPC now imports petroleum form Kuwait's KPC, Malaysia's Petco, Philippines' PNOC, Maldives' MNOC and Egypt's Midor.
BPC is projected to raise its annual oil imports by over 33% to 4.85 million mt/year next year from 3.70 million mt/year as the country moves to tackle a power crisis by building dozens of new gasoil- and fuel oil-fired power plants.
Meanwhile, BPC is moving to raise its subsidiary Eastern Refinery Limited's refining capacity to 4.5 million mt/year from 1.5 million mt/year to meet the soaring oil demand
