Jan 29, Colombo: Sri Lanka's state-owned fuel supplier Ceylon Petroleum Corp (Ceypetco) plans to purchase oil products from China's largest oil producer and distributor, PetroChina.

Ceypetco has finalized a term contract for the purchase of nearly 3 million barrels of oil products for delivery over a six-month period from PetroChina, Reuters said in a report Monday.

The deal made on a proposal by Minister of Petroleum Industries Susil Premajayantha, has received cabinet approval subject to stipulated conditions, as recommended by the Special Standing Cabinet Appointed Procurement Committee (SSCAPC).

The term tender would be for combined cargo and would run for six months from Dec 01, 2012 to May 31, 2013.

According to the industry sources, this is the first time Ceypetco is purchasing term barrels from the Chinese company although it has made spot purchases before.

Ceypetco has reportedly bought 675,000 barrels of 0.25 percent sulphur gasoil at a premium of $1.98 a barrel above Singapore quotes and 475,000 barrels of jet fuel at a premium of $1.76 a barrel.

It has also purchased 1.56 million barrels of 90-octane gasoline at a premium of $1.98 a barrel and 125,000 barrels of 95-octane gasoline at a premium of $2.53 a barrel.