* Company plans to be long heavy naphtha next year -trader
* Valero uses Aruba refinery for storing refined products
By Marianna Parraga
HOUSTON, Oct 8 (Reuters) - Valero Energy won the biggest fuel tender for Latin America so far this year on Tuesday and will send 14.25 million barrels of ultra low sulfur diesel (ULSD), jet fuel and motor gasoline to Costa Rica's Recope refiner, traders close to the deal told Reuters.
With Costa Rica's 25,000 barrels per day (bpd) Moin refinery undergoing a long maintenance program, traders said Valero was a favorite to win because of its ability to offer low prices for its stored fuels going to Latin America.
An independent trader said Valero's offer was almost impossible to beat because it had lots of stored fuel close to Central America. He declined to reveal the agreed upon prices.
"Its plan says the company will be long heavy naphtha next year, so this Recope tender will be perfect to get rid of that," a Valero trader said.
"Valero is agressively penetrating Latin America, the company does not get involved in a tender if it does not have a chance to win it. The trader's desk has more flexibility now," the Valero trader added.
The company was not immediately available to comment.
Recope's board of directors on Tuesday told the companies participating in the tender that Valero won for 6.9 million barrels of ULSD, 6.05 million barrels of gasoline and 1.3 million barrels of jet fuel.
The 67 cargoes should be delivered starting in November over the coming 12 months, according to documents about the tender, launched in September.
Recope company will import some 40,000 bpd to satisfy most of the country's domestic demand, which is expected to grow 7 percent to reach 52,000 bpd this year, according to Recope's projections.
The Central American country will spend more than $2 billion this year in fuel imports, a substantial portion of its gross domestic product of some $40 billion, to supply its growing internal consumption.
Recope and state-owned CNPC plan to more than double the refinery's output through a joint project that would receive a loan from Chinese banks. But Costa Rica said in June it would halt the 1.5 billion project after fighting with the contractors.
Moin, next to the Caribbean port of Limon, is looking for another company to undertake the refinery's feasibility study, the Government said. It is still possible that CNPC participates in the expansion.
SUPPLYING LATIN AMERICA
Valero has several refineries with deep conversion units in the United States, which allow the company to convert heavy crude into the high sulfur finished products that Latin America needs. The company is also storing fuels using the Aruba refinery, closed since it is being offered for sale.
The company has been known to buy Mexican crude from, and sell finished fuels to, Mexico's state-run PEMEX. It has also been getting crude from Petroleos de Venezuela (PDVSA) and selling refined products, acoording to traders.
With the second-biggest domestic market in Latin America, Mexico exports most of the crude that PEMEX produces, but it also imports a big portion of the finished products the domestic market needs.
With an equivalent crude production to Mexico but less domestic consumption, Venezuela only used to import specific oil components, but since a severe explosion damaged its main refinery last year, state-owned PDVSA is buying more than double the amount of refined products it used to import.