India's state-controlled refiner Hindustan Petroleum (HPCL) is seeking to buy 354,000t of bulk bitumen for delivery at six different locations in a rare tender spanning across a year.
It is looking to purchase VG30 and VG40 grade cargoes on a "port-based procurement price", using the average of fob Bandar Abbas, Iran prices assessed by Argus for the past two weeks but excluding the report published in the last two working days in this period. HPCL will also take the average of freight assessments from Bandar Abbas to Karwar and Mundra, India assessed by Argus in the previous two weeks and excluding the last two working days in this period.
The refiner asked for submission of bids by 22 May after issuing the notice on 8 May. HPCL is due to buy a total of 215,000t of VG30 bulk bitumen grade for delivery to the ports of Mundra, Pipavav, Mangalore, Haldia, Chennai and Karaikal. Another 139,000t of VG40 grade bulk bitumen is also lined up for purchase at the same six ports.
The bidder should have minimum tankage of 2,000t suitable for storage of bulk bitumen VG30/VG40, with associated heating facilities, at installations located within 50km by road from the nearest port from which supplies for HPCL requirements will be made, the tender stated. The product can be sourced domestically or imported.
HPCL operates a 190,000 b/d refinery in Mumbai and a 166,000 b/d refinery in Visakhapatnam and is seeking to buy bitumen cargoes for delivery to locations where it does not have a refinery.
HPCL is one of the key bitumen sellers in the Indian domestic market, along with fellow state-controlled counterparts Bharat Petroleum (BPCL) and IOC. The past year has seen BPCL issuing import tenders for delivery to locations where it does not operate a refinery. This was to cover supply gaps, as infrastructure development remains a key focus for the Indian government.
India's estimated bitumen consumption is expected to again exceed 8mn t in 2023, likely adding at least 100,000-300,000t of demand from a year earlier. Its consumption in 2022 rose to 8.2mn t, the highest since the oil ministry started publishing data in 1999.
The country's net deficit of bitumen has widened despite the Covid-19 pandemic limiting demand, prompting domestic refiners to issue tenders to buy to cover the supply shortfall. India is the largest buyer of Middle East-origin bitumen and imported about 2.4mn t of the road paving material in 2022.
