20110816
Reuters
LONDON (Reuters) - Turkey is ramping up shipments of diesel to Libyan rebels, effectively joining Qatar and trader Vitol in fuelling the uprising against leader Muammar Gaddafi.

Trade sources told Reuters Turkey is preparing to deliver a another, larger shipment of fuel to the rebels in the east as part of a multi-million dollar deal.

Ankara is stepping up support at a time that the rebels are in their strongest position since the uprising began in February against 41 years of Gaddafi rule. They have advanced into the town of Zawiyah, 50 km west of Tripoli, cutting off Gaddafi's stronghold in the capital from its supply lifeline to Tunisia.

"The motivation for this kind of relationship is political, more than trade" said a source with direct knowledge of the deal. "The purpose is improving relations."

The payment is expected to be made in cash under the terms of a credit agreement negotiated between the government and the rebel leaders.

The possibility of receiving shipments of Libya's prized sweet crude once production restarts in return for supplies of diesel has also been discussed.

Turkey so far has not agreed on any long-term supply deal with Libya's National Transitional Council, which Ankara recognized last month. But its current support could lay the groundwork for negotiations with the rebels once Libya's eastern oil fields are up and running.

Last month Turkey sent two cargoes, amounting to around 10,000 tonnes worth around $10 million, to the cash-strapped rebel government, which eased energy shortages and were seen as vital to the struggle against Gaddafi. Another equally sized shipment arrived early this month.

The most recent tanker is booked to load 14,000 tonnes of diesel - more than 100,000 barrels - on Wednesday and is likely to reach Benghazi at the end of the month. It will double total deliveries from Turkey to around 30,000 tonnes.

The fuel will be supplied by Turkish Petroleum International Company, a subsidiary of state-owned oil and gas exploration company Turkiye Petrolleri (TPAO). The shipment will more than double the volumes sent in the two previous cargoes.

Turkey has a refining capacity of 613,000 barrels per day, which roughly meets its own annual consumption requirements, but it needs fuel imports during peak times including the summer.