* Sri Lanka was regular importer of Iran crude until sanctions
* Has used Murban, Oman light as alternatives
* Mulling permanent switch to Murban -source (Adds detail)
By Jessica Jaganathan
SINGAPORE, Aug 20 (Reuters) - Sri Lanka’s Ceylon Petroleum Corp (Ceypetco) is seeking Murban crude oil term cargoes for the first time, after buying the oil in the spot market recently, industry sources said on Thursday.
Sri Lanka was a regular importer of Iranian oil until Western sanctions were imposed in 2012, when Colombo sharply reduced its purchases of crude from the country and later switched to spot imports of Oman light and Murban crude oil.
“There has been a change in the refinery process and it’s now more profitable for (Ceypetco) to buy Murban crude oil,” one of the sources close to the matter said.
“There is a higher yield of value-added oil products like middle distillates and gasoline and the sulphur is low.”
The company is still mulling if it will permanently switch to Murban crude oil imports, but for now will meet its requirements through the term contract, the source added.
In the term tender, Ceypetco is seeking 10 cargoes of 700,000 barrels each of Murban crude oil for delivery into its single point buoy mooring 1 in Colombo, according to one of the sources.
The cargoes are to be delivered over Dec. 1, 2015 to July 31, 2016.
The tender closes on Sept. 2 and is valid for six weeks.
Ceypetco has requested the cargoes be loaded from either Jebel Dhanna or Fujairah in the United Arab Emirates.
Crude oil similar or identical to Iranian crude oil will not be permitted, according to a tender document. Loading ports under U.S. sanctions will also not be accepted.
Sri Lanka’s only oil refinery - a decades-old, 50,000 barrels-per-day (bpd) plant run by Ceypetco - is configured to run on Iranian crude. The Sapugaskanda refinery, near Colombo, has faced closure at times as it scrambled to fill shortfalls due to the sanctions on Iranian oil.
Sri Lanka has been importing Oman light and Murban crude from Abu Dhabi, but Ceypetco officials previously said that the yield at the refinery from processing these alternative crudes had been 15-20 percent lower than that from Iran light.
It is not clear by how much the yield has improved since then. (Reporting by Jessica Jaganathan; Editing by Joseph Radford)