Glencore Wins Tender to Supply Crude to UK's Lindsey Oil Refinery
(Reuters) — Global commodities trader Glencore has won a tender to supply crude oil to Prax's 113,000-barrel per day Lindsey oil refinery in Britain, replacing rival trader Trafigura, three sources with knowledge of the deal told Reuters.
The deal bolsters Glencore's oil trading operation and follows the recent joint acquisition of Shell's Singapore refinery and petrochemical assets with Chandra Asri.
UK-based independent oil company Prax selected the most "commercially advantageous offer" in a tender process that started in the fourth quarter of last year, according to a statement issued to Reuters. The company declined to disclose details of the agreement, including the winner.
Neither Glencore nor Trafigura commented on the status of their respective deals with Prax when asked by Reuters.
Trafigura had supplied crude oil and refinery feedstocks to the Lindsey refinery since 2021, when Prax acquired the plant from French oil major TotalEnergies.
Weaker refining margins in recent months have weighed on refiners' profits, which can make it harder to finance crude purchases.
Profit margins for refineries in Northwest Europe have been sapped by lackluster demand for diesel in particular, while rising global supply and slow U.S. demand are also capping gasoline margins.
Refineries typically prefer to pay for crude cargoes at a later date using credit lines from banks, as this allows them time to sell the fuels yielded from the refining process to raise funds.
But major trading houses can offer financing solutions on favorable terms that smaller independent firms wouldn't have access to from banks, making such supply deals attractive for both counterparties.
A corporate filing uploaded in March on a UK government website, which listed Prax Lindsey Oil Refinery Limited as a "buyer" and Glencore Energy UK Ltd as the "seller", suggests that the framework of a deal was in the pipeline several months ago.
Prax said it received a total of 13 offers during the tender process.
The Lindsey oil refinery is one of six in the United Kingdom, and supplies fuels such as petrol, diesel and jet fuel into the downstream market by road and rail, and via a pipeline connected to the Greater London area.
Related News
Related News
- Trump Aims to Revive 1,200-Mile Keystone XL Pipeline Despite Major Challenges
- Valero Considers All Options, Including Sale, for California Refineries Amid Regulatory Pressure
- ConocoPhillips Eyes Sale of $1 Billion Permian Assets Amid Marathon Acquisition
- ONEOK Agrees to Sell Interstate Gas Pipelines to DT Midstream for $1.2 Billion
- Energy Transfer Reaches FID on $2.7 Billion, 2.2 Bcf/d Permian Pipeline
- U.S. LNG Export Growth Faces Uncertainty as Trump’s Tariff Proposal Looms, Analysts Say
- Tullow Oil on Track to Deliver $600 Million Free Cash Flow Over Next 2 Years
- Energy Transfer Reaches FID on $2.7 Billion, 2.2 Bcf/d Permian Pipeline
- GOP Lawmakers Slam New York for Blocking $500 Million Pipeline Project
- Texas Oil Company Challenges $250 Million Insurance Collateral Demand for Pipeline, Offshore Operations
Comments