Saudi Aramco has announced delays of up to two weeks to its June LPG term cargo lifting program to North Asian lifters and decided not to allow the usual 10% tolerance on the plus side for supplies of propane and butane, traders said.

This was due to lower-than-expected production in Saudi Arabia during the summer, when output is normally raised to meet demand from the petrochemical sector.

At least one Japanese company, Showa Shell, will also have lifting of some volumes shifted to Red Sea port of Yanbu, instead of Ras Tanura on the east coast, traders said.

But in its announcement of acceptances of nominations for cargoes to be exported next month, Saudi Aramco will not cut term supplies of butane and propane from the contracts, traders said.

"There are some delays. But not a huge delay," one trade source said. "For some customers, yes, the delay is quite long."

"Aramco is not giving the plus tolerance for both propane and butane. It has a huge production system, but this time production is a little less than expected," he said, adding that summer production is usually higher than during winter.

Japanese trading house Sumitomo will see a slight lifting delay of four days, Japan's second-largest LPG supplier Eneos Globe will see a seven-day delay, top Japanese supplier Astomos Energy will get an eight-day delay, while South Korea's SK Gas will see a 14-day delay, traders said.

The last time Saudi Aramco removed the 10% tolerance on the plus side was in December for its January term butane exports, while there was also a 10-day loading delay in shipments to Asian buyers. No reasons were given for the loading delay or the removal of the tolerance for January, although some traders said it could be have been due to operational reasons.

LPG suppliers typically provide a 5-10% plus/minus tolerance on nominated volumes.

Trade sources said Saudi Aramco was also not expected to offer any spot cargoes for June loading due to the lower-than-expected output and to divert supply to the domestic petrochemical industries.

This came after Aramco had sold some parcels for end-March and April loadings, as well as one evenly split LPG lot for May, following none offered between December and February.

Earlier this week, Abu Dhabi National Oil Company made made no cuts or major delays to its June term allocations to Asian lifters.

Some traders said the move by Aramco could prompt concerns of tight supply, though they expect other Middle Eastern producers such as Qatari Tasweeq and ADNOC, as well as third-party traders, to emerge with June offers, to fill the void left by Aramco.

This is especially so since VLGC rates for shipments from the Middle East to North Asia have slid below $80/mt from records above $130 around end-April.

But other traders said that freight rates remained high versus cargo CFR premiums for delivered sales and traders are awaiting further decreases in freight rates.