Saudi Arabia said it would cut exports to Asia in gasoline refinery maintenance

Saudi Arabian Oil Co., the world's biggest state-owned oil can reduce gasoline exports to Asia next year due to the maintenance of refineries, said buyers were notified of the company's plans during the talks supply.

The company, also known as Saudi Aramco, could reduce shipments of 10 to 20 percent in the first half of 2011, said four buyers who participated in the discussions of the contract earlier this month, requesting anonymity that discussions were confidential. Asia buys about 4 million tons of naphtha through long term contracts with Saudi Arabia every six months, according to estimates by two people.

Supplies are likely to decrease in February or March, when the producer carries out maintenance work at a refinery in Jubail, the people said. Saudi Aramco Shell Refinery Co., or Sasref, a joint venture between Saudi Aramco and Royal Dutch Shell Plc, located in Jubail, will hold its next full stop in 2011, a company official said in January 2009.

Rabigh Refining and Petrochemical Co., a joint venture between Sumitomo Chemical Co. and Saudi Aramco, also plans to close its plant maintenance for 30 days after the third week of April, Ziad Al-Labban, the unit executive director, said at a conference on 8 December.

Refining margins for gasoline have risen amid speculation Saudi Arabia cut supplies next year, buyers said. The price of gasoline grade open specification for delivery to Japan on a premium of $ 161.02 a tonne above Brent crude on 10 December, compared with $ 138.74 a tonne on November 10 as data compiled by us. The value of the crack spread has increased by 16 percent from the previous month.

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The producer set the price of gasoline Rabigh of dedication to buyers in Asia in the first half of 2011 with a premium of $ 16 per tonne above the benchmark formula, two people involved in the negotiations, said on December 1 . A-180 grade was sold at a premium of $ 17 per ton, Jubail at $ 15 per ton and 310-A $ 14 per tonne. A-310 is loaded from the Red Sea port of Ras Tanura.

Supplies in the six months to December this year, Saudi Aramco Rabigh naphtha degree offered $ 21 per tonne above its reference point and Jubail at a premium of $ 19 a tonne, traders said in May. Jeddah grade sold for $ 17 per tonne, a level-310 at $ 19 a tonne and a degree-180 at $ 20 a ton.

Saudi Aramco sold out of gas on board, that require buyers to pay shipping. The formula contains reference point naphtha prices published by Platts Middle East and Argus Media Group, two servings of oil pricing. The company sells gasoline on an annual basis under contracts that allow renegotiation of the terms this summer.

Naphtha, distilled from crude oil, is a raw material for gasoline and petrochemicals.