Refining company Phillips 66 was awarded a tender to supply Mexico’s Pemex with at least four 350,000-barrel cargoes of U.S. Bakken crude for November delivery, the refining company said on Monday.
The purchase, which will be the state-run company’s first crude import in over a decade, was requested last week to cover needed oil supply for Pemex’s 330,000-barrel per day Salina Cruz refinery amid Mexico’s falling production of light grades.
A previous attempt by Pemex to import U.S. Light Louisiana Sweet (LLS) crude failed in early October due to a narrow delivery window and an outdated price reference, according to traders and the company.
Pemex urgently needs to secure a source of foreign light crude to increase its refineries’ low processing rates. In August, the firm produced 789,500 barrels per day (bpd) of fuel, about half of its total capacity, according to official figures.
Pemex requested up to six 350,000-barrel cargoes of Bakken crude, a type of U.S. shale oil, but it awarded four, the company said. It did not disclose the name of the winner or the price agreed.
“We are currently in the process of signing the contracts,” Pemex said in a press release.
Traders with knowledge of the offer’s results said on Monday that Phillips 66 had won the contract. The company confirmed it in the evening.
The Bakken crude for Pemex is expected to be transported by pipeline from North Dakota to U.S. Gulf ports.
Phillips 66 Partners, a unit of Phillips 66, has a 25-percent stake in the Bakken Pipeline system, which includes the Dakota Access Pipeline and another pipeline that can transport up to 520,000 bpd of oil to Beaumont, Texas.
“Phillips is looking for tankers to start deliveries as soon as possible,” one the traders said.
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