Royal Dutch Shell PLC (RDSB) plans to purchase more than 14.6 million barrels of ultra-low-sulfur diesel in 2010 from Japanese, South Korean and Taiwanese refiners, up more than 60% from last year's term volumes, according to a trader familiar with the matter.

However, the company is taking a more bearish view of jet fuel, signing a 2010 contract to buy just 2.1 million barrels from South Korea's S-Oil Corp. (010950.SE), or more than 40% less than last year, the trader said.

In Japan, Shell plans to purchase 12 cargoes with a combined 3.6 million barrels of ultra-low-sulfur diesel--also known as 10-parts-per-million-sulfur gasoil--from Nippon Oil Corp. (5001.TO), and four cargoes of a combined 1.2 million barrels from Idemitsu Kosan Co. (5019.TO) at premiums around 75 cents a barrel to benchmark Singapore quotes.

Shell will also buy six cargoes with a combined 1.44 million barrels of gasoil from Taiwan's Formosa Petrochemical Corp. (6505.TW) at a premium around $1.60 a barrel.

Finally, the company has renewed an agreement to purchase 12 cargoes of a combined 8.4 million barrels of gasoil from South Korea's GS Caltex Corp. at a premium of about $1.30 a barrel.

Shell's gasoil term volumes for 2010 are more than 60% higher than in 2009, when it bought 7.2 million barrels of ultra-low-sulfur diesel from GS Caltex and 1.8 million barrels from S-Oil at premiums of $2.25-$2.60 a barrel, respectively.

Separately, South Korea's S-Oil Corp. (010950.SE) will resupply Shell with three jet fuel cargoes of a combined 2.1 million barrels at a discount of about 60 cents a barrel to quotes, the trader said. The jet fuel term volumes are lower than in 2009, when S-Oil supplied 3.6 million barrels to Shell at a discount of around 75 cents a barrel.

A spokeswoman for Shell said the company typically doesn't comment on trading and operational matters.

Even when the East-to-West arbitrage economics are closed, Shell is known to ship diesel and jet fuel from North Asia back to Europe to supply its vastly integrated system, according to a survey of shipping fixtures and traders.

"They can make a lot disappear," a Singapore-based trader said. "Their economics are completely different."

Although the company doesn't win many regional spot market tenders to buy or sell middle distillates, it has regular supply outlets to countries such as the Philippines, Indonesia, Malaysia and Australia, traders say. Shell has won several tenders this past year to supply jet fuel to Philippines' Petron Corp. (PCOR.PH), and it has a large contract to supply gasoil to Indonesia's AKR Corporindo (AKRA.JK), traders say. Shell also has been known to sell high-sulfur gasoil to Indonesia's state-owned oil company PT Pertamina.

In addition, Shell may store some of its term barrels in Singapore, where the company has access to about 300,000 cubic meters--or about 1.8 million barrels--of middle distillates storage at Tankstore Ltd.'s terminal in Pulau Busing, according to two traders familiar with the matter.

-By Wayne Ma, Dow Jones Newswires; +65 6415 4065; wayne.ma@dowjones.com