April 12, 2017 / 4:37 PM / 3 years ago

Venezuela's PDVSA readies armada of fuel imports -traders

HOUSTON, April 12 (Reuters) - About a dozen tankers are sailing to Venezuela or waiting offshore to discharge cargoes after state-run oil company PDVSA ramped up tenders to buy gasoline and other fuels to offset its weak refining output, according to traders and Thomson Reuters data.

Petroleos de Venezuela SA (PDVSA) recently awarded BP , Castleton Commodities, Rosneft and CT Energia contracts to buy more than 15 cargoes of gasoline blend stock, diesel, vacuum gasoil, catalytic naphtha and cutter stock for delivery from April through May.

The total volume expected for the coming weeks surpasses 4 million barrels, according to traders and tender documents circulated by PDVSA.

Venezuela can produce up to 1.3 million barrels per day (bpd) of fuels at its refineries. It typically exports a large volume of fuel oil and others products, but its operations have been working well below capacity this year amid frequent equipment outages.

Most of the coming cargoes were sold under prepayment agreements, meaning the tankers are not authorized to discharge at PDVSA’s terminals until payment is received, the traders said.

Under a similar arrangement, BP sold 13 cargoes of U.S. crude to PDVSA last year. But the tankers waited for weeks or months before receiving authorization to discharge amid payment issues.

The delays forced a repricing of the cargoes. The Venezuelan firm ended up paying some $130 million more than it planned for the crude imports.

Crisis-hit Venezuela spent months negotiating with investment banks, offering bonds as a guarantee, as it sought to boost liquidity ahead of steep debt payments beginning this month.

On Wednesday, PDVSA paid roughly $2.2 billion of the nearly $3 billion the country owes to bondholders this month.

In the meantime, unpaid bills from PDVSA’s suppliers keep piling up, while the firm tries to restart refining units that produce fuels to avoid a new shortage of gasoline.

Long lines at service stations in March followed a shortage of fuels that the government blamed on distribution problems.

PDVSA has recently signed swap deals that minimize payments in cash when buying fuels, but many providers insist on prepayment when dealing with Venezuela. It has also increased imports from its U.S. unit, Citgo Petroleum.

In the most recent refinery incident in Venezuela, a fire occurred in a warehouse at El Palito refinery on Tuesday. PDVSA said there were no injuries or damages to the facility, but a worker said security equipment and spare parts were damaged.

Reporting by Marianna Parraga; Editing by Tom Brown

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