UPDATE 1-Shell force majeures Singapore distillates sales-trade

* Force majeure affects mostly distillates cargoes sold during pricing period

* Counterparties include Hin Leong, Glencore, BP, JP Morgan

* Refinery expected shut for at least a month, as investigations start (Adds details, market comments, background)

By Yaw Yan Chong and Francis Kan

SINGAPORE, Sept 30 (Reuters) - Royal Dutch Shell Plc (RDSa.L) has declared force majeure on its distillates deals following a fire that forced the shutdown of its 500,000 barrel-per-day (bpd) Singapore refinery, traders said on Friday.

At least two counterparties, who bought gas oil cargoes from Shell during the end-of-day pricing window, said they received notice from the oil major that it was declaring force majeure on all sales for which it has already made nominations for cargoes to be lifted from its Bukom refinery.

Shell Singapore spokesman could not immediately comment.

The note, titled 'Notice Of Force Majeure' said: "In the circumstances, we have no alternative but to formally declare that our ability to supply the product under the contract has been adversely affected by an event beyond our control."

It was signed by Dr Philip Choi, the president of Shell's Asia trading arm, Shell International Eastern Trading Compo any (SIETCO).

Traders said most of the sales affected by the force majeure are deals transacted during the end-of-day pricing period.

"The Force Majeure applies to cargoes sales in which they have declared Bukom as the loading terminal. They are referring to it on a contract-by-contract basis," one of the affected traders said.

"Shell sold a lot of gas oil during the pricing window period in the past month, into Hin Leong's bull trading play, including those with loading dates over the affected period."

Reuters data showed that there are 11 deals, with a total volume of about 1.5 million barrels of mostly distillate cargoes as well as a gasoline parcel, all for loading between Sept. 28 and Oct. 6.

Counterparties include Singapore trader Hin Leong, with six cargoes of 100,000-180,000 barrels each; Glencore with three parcels, including the gasoline lot, while BP and JP Morgan has one each.

Another five distillate deals, for Oct. 7-15 lifting, were novated, that is, another party has been contracted to take over Shell's sales.

The impact of the shutdown of the company's largest refinery, with a 500,000 barrels-per-day (bpd) capacity, is mostly felt in the Asian gasoline and distillate markets, where Shell is a major supplier as well as a trader.

The refinery produces 6.5-7.0 million barrels of distillates, of which gas oil is about 4.5 million barrels. It also produces another 4.0-4.5 million barrels of gasoline, based on estimates culled from its capacity, with about 90 percent of the refinery's output exported.

In all, Shell sold nearly 3 million barrels since Sept. 1.

Gas oil's cash premiums have risen since Wednesday, and was valued at 45 cents a barrel to Singapore spot quotes at Friday's Asian close, its highest in two weeks, and jumping from 5 cents on Tuesday, a day before the fire.

It was lifted by strong bids, including a rare bid by Glencore for a cargo loading on dates outside the pricing period at an above-market price.

The 150,000-barrel lot of 0.5 percent sulphur gas oil, for Oct. 7-11 lifting, was bid at a premium of 70 cents a barrel to spot quotes.

Force majeure is a clause provided in contracts that allows buyers or sellers to renege on commitments due to events that are beyond control.

The refinery, Shell's largest, is expected stay shut for at least a month, after the fire was extinguished late Thursday night following a more than 30-hour blaze, refining sources said.

"They will need to investigate the cause, to see if it is a mechanical fire or a process one, that is, whether it is caused by a person doing something or that there is some fault or defect with the process," the source said.

"They will then need to isolate the area, before units elsewhere in the plant can restart, and need to identify if it is an upstream or downstream problem."

Martjin van Koten, Shell's vice-president for manufacturing operations, said on Thursday that the fire occurred white maintenance work was being carried out at a Pump House near its 35,000 barrels-per-day (bpd) hydrocracker, a distillate-making unit.

(Reporting by Yaw Yan Chong and Francis Kan; Editing by Manash Goswami)