Singapore (Platts)--8Feb2013/524 am EST/1024 GMT

Saudi Aramco has emerged with a spot offer of LPG for end-February loading after a two-month hiatus, prompted by the maintenance shutdown at the kingdom's Kayan Petrochemical plants for 10 weeks from February 10, market sources said Friday.

The 44,000 mt parcel of evenly split refrigerated LPG is entering the spot market at a time when prices are seeing a recovery from recent doldrums, as Japan builds up inventories that had been depleted during winter when the Northeast Asian consumer limited imports.

But some traders said Japanese importers might have already bought most of their requirements for stock-building ahead of the close of the financial year in end-March.

"The Japanese have done buying it seems. Let's see how much more they need," one market source said.

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"Let's see if there are any takers on this one. Seems no one wants to be long on FOB AG cargoes for delivery second-half March into Northeast Asia. But importers can of course buy."

Traders said that following the sale late Thursday by Vitol to Cargill, heard done at a premium of $53/mt to the Saudi Aramco March Contract Price, CFR North Asia, for a 22,000 mt cargo of propane for first-half March, Aramco could be prompted to offer its cargo around $5/mt above the March CP, on a FOB basis.

"They can ask for sure," one trader said.

Price differentials for FOB Persian Gulf cargoes for March loading have been inching up over the past week from the discount levels transacted for most February cargoes on improved market sentiment, traders said.

Saudi Aramco had also been lowering its monthly contract prices for propane since December, setting the latest February CP at $910/mt, down $45/mt from January CP, helping to stir demand. Some sources said that Aramco might be looking at spot offers to test the level for its March CP due at the end of this month.

Turkey's Bayegan sold a cargo comprising 33,000 mt of propane and 11,000 mt butane for March 3-5 loading on a FOB Ras Laffan basis at between parity and a slight premium to the Saudi March CP earlier this week, traders said.

Abu Dhabi Gas Liquefaction Company's export tender for a 44,000 mt evenly split cargo for March loading from Das Island was heard awarded to Japanese trader Cosmo Oil, at a small premium to Saudi Aramco's March CP for propane and butane, FOB basis.

Prices of propane for first-half march delivery into Japan rose $2/mt overnight to be assessed at $967/mt Thursday -- the highest since January 23, when they hit $972/mt, Platts data showed. Butane was assessed at $964/mt Thursday, up $2/mt from the previous day.

But on Friday, propane edged back down to be assessed at $958/mt and butane at $955/mt, as buyers stayed away ahead of the long Lunar New Year holidays.

Saudi Arabia has been reducing spot exports since last September, limiting monthly shipments to one or two cargoes. Spot shipments in November were estimated at two cargoes, down from four cargoes in August and down sharply from last year's peak of up to 11 spot parcels of 44,000 mt each, in July.

Aramco has skipped spot sales for December and January loadings. Industry sources had earlier said the state-owned firm might do the same for February, especially since two other petrochemical complexes in the kingdom -- Saudi Polymers Company's Jubail plant and the Petro Rabigh facility -- had returned from maintenance in January.

But on Thursday, sources close to the company said Saudi Kayan Petrochemical plans to shut its 566,000 mt/year monoethylene glycol plant and 550,000 mt/year ethylene oxide plant at Al Jubail this Sunday for maintenance.

The olefins facility at the same site, which includes a 1.478 million mt/year ethylene plant and 630,000 mt/year propylene plant was shut February 5 for a three-week turnaround, they added.

Traders said the shutdowns would free LPG as feedstock from the petrochemical plants, allowing Aramco to have spot cargoes for export even in March, filling in any shortfalls in the Asian market caused by the absence of Iranian supply due to the EU sanctions on its propane and butane trade.

--Ramthan Hussain, ramthan_hussain@platts.com
--Edited by Irene Tang, irene_tang@platts.com

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