Wires

Pertamina concludes LSWR term contract talks at lower premiums

SINGAPORE, Oct 9 (Reuters) - Indonesia's state-ownedPertamina has concluded term negotiations to supplylow sulphur waxy residue (LSWR) in the fourth quarter at lowerpremiums, traders said.

The term contract, to supply about 200,000 barrels of V1250grade LSWR a month, was awarded at a premium of $50.00-$55.00 atonne to Singapore quotes, according to the traders.

This is significantly lower than last quarter's premium of$130.00 a tonne above Singapore quotes. The buyers were Mitsui,Itochu and Shell, the traders said.

The fall was mainly due to weak demand from Japan, whereenergy conservation efforts and lower-than-expected summertemperatures curbed the country's fuel oil consumption.

"Summer (demand for low sulphur fuel oil) didn't go as welland I don't think we can expect much this winter, so no waypremiums are recovering to where they were in the beginning ofthe year," a trader said.

Pertamina is one of the region's biggest LSWR suppliers andtypically exports up to 1 million barrels a month from itsBalikpapan refinery, most of it via term tenders.

(Reporting By Lee Yen Nee and Jessica Jaganathan; Editing ByMiral Fahmy)

((lee.yennee@thomsonreuters.com)(+65 68703823)(ReutersMessaging: lee.yennee.thomsonreuters.com@reuters.net))

Keywords: LSWR INDONESIA/PERTAMINA