* Company plans to be long heavy naphtha next year -trader
* Valero uses Aruba refinery for storing refined products
By Marianna Parraga
HOUSTON, Oct 8 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
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
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
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
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.