Vietnam’s Petrolimex has sealed 2010 term deals to buy up to 2 million tonnes of diesel from more than four sellers, more than double last year’s volumes to meet growing demand, traders said yesterday.

The sellers include Kuwait Petroleum Corp (KPC) and South Korea’s SK Energy. But LUKOIL will not be among the suppliers, as a preliminary deal between the Russian supplier and Petrolimex faltered on differences over loading ports, traders said. “The negotiation with LUKOIL ended up with nothing,” said a second trader.

Petrolimex usually buys diesel on an FOB basis, meaning that it needs to charter its own vessels to lift the cargoes. As a result, it has certain port preferences for economic reasons.

Traders said the country’s top fuel importer will likely still meet the bulk of its demand for next year via imports, as operations at Vietnam’s only refinery, which was touted to help it gain fuel self-sufficiency, has still not fully stabilised.

“Generally, operations at the Dung Quat refinery is still not that smooth. The volumes they can supply will likely be limited for now,” said a trader.

The 140,000 barrel-per-day (bpd) refinery was closed for a 20-day maintenance since December 23, the second time the plant is shutting down this year. It went offline last August following technical problems and resumed operations around late September.

Petrolimex will pay prices equivalent to around 60-70 cents a barrel discount to Singapore 0.25 percent quotes, on a free-on-board (FOB) Singapore/Taiwan/China basis, for the 0.25 percent grade, and 10-20 cents more for the 500ppm grade. “Petrolimex bought both 0.25 percent and 500ppm grades,” one trader said.

The volumes - more than last year’s term amount of nearly 960,000 tonnes - comprise around two medium-range parcels a month, and a total of nine Aframax cargoes for the whole year. These will meet 40-50 percent of what Petrolimex needs to supply the country next year, estimated at 4 million tonnes, traders added.

Petrolimex, which gets some 40,000-50,000 tonnes of diesel and gasoline a month from Dung Quat - the country’s first oil refinery - will continue to issue its quarterly tenders, with the one for the first quarter due next week.

The term and spot imports are still needed in order to secure supply as Vietnam’s economy is projected to expand at a faster rate of 6.5 percent next year, after growing 5.2 percent this year and 6.23 percent in 2008.