Aramco's trading arm inks product supply deal with Australia's United Petroleum

Saudi Aramco's trading arm has signed an agreement with Australian fuel retailer United Petroleum for a potential long-term supply and storage of refined products to tap growth domestically and abroad.

Under the non-binding memorandum of understanding, Aramco Trading Co. plans "to explore the sale and supply of refined fuels to United Petroleum to meet fast-growing demand in its network of facilities in Australia and elsewhere," it said in a statement Dec. 23.

"The MoU covers potential long-term fuel supply, product storage and other business opportunities."

Aramco Trading Co. didn't disclose the potential value or amounts to be supplied under the memorandum. It also didn't disclose when it might start supplying Australia with refined products.

"At the same time, ATC and United Petroleum will explore product storage and logistics collaboration, with a view to generating long-term value for both businesses," it added. "They will also assess additional areas of potential cooperation, both in the energy sector and other growth areas."

Australia's refined product imports are forecast to rise 12% to 725,000 b/d in the current financial year that ends June 30, 2022, while crude and condensate imports are projected to drop 20.6% to 196,000 b/d, according to Australia's Department of Industry, Science, Energy and Resources.

Lower crude imports

Australia's September crude imports fell 10% year on year and 5% lower month on month at 5.55 million barrels, according to preliminary data from the Department of Industry, Science, Energy and Resources.

Imports in the first nine months of 2021 registered at 62.86 million barrels, down from 66.93 million barrels in the same period last year, the data showed.

Australia's two biggest cities -- Sydney and Melbourne -- remained under lockdowns throughout the Q3 and early October, leading to a sharp drop in general consumer transportation fuel consumption.

The country's crude runs fell to 225,000 b/d in September, down from 350,000 b/d a year earlier, according to data from S&P Global Platts Analytics.

Malaysia shipped 2.98 million barrels in September, surging 87% year on year but down 21% month on month. The Southeast Asian country supplied 54% of the monthly total shipments.

About 43% of Australia's September crude import was evenly supplied by Brunei Darussalam, New Zealand, and Vietnam.