S-Oil, Saudi Aramco sign W1,200bn diesel, naphtha supply deal

SINGAPORE (ICIS)–S-Oil has signed a Korean won (W) 1,200bn ($1.1bn) agreement to supply naphtha and diesel to Saudi Aramco Products Trading Co from February to December this year, the South Korean refiner said on Monday.

S-Oil will supply up to 14m barrels of diesel, including ultra-low-sulphur diesel and low-sulphur diesel, and up to 14m barrels of light naphtha to the trading arm of energy firm Saudi Aramco, the South Korean firm said in a bourse filing.

The trading firm, in turn, supply the South Korean refiner 2m barrels of heavy naphtha and 120,000 tonnes of paraxylene (PX).

The deal follows S-Oil’s announcement on 20 January that Saudi Aramco’s stake in the firm rose to 63.5% from 35.1%, following the Saudi energy firm’s purchase of S-Oil’s shares from South Korean conglomerate Hanjin Group.

S-Oil Corp is the third-largest oil refining and marketing company in Korea by refining capacity, according to Moody’s Investors Service.

It has a refining capacity of 669,000 bbl/day, representing around 23% of South Korea’s overall refining capacity. It also operates paraxylene (PX), benzene-toluene-xylene (BTX) and lubricant plants.

($1 = W1,098)