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Citgo charters products tanker from USGC to Aruba

  • Market: Freight, Oil products
  • 08/08/19

Citgo, the US refining subsidiary of Venezuela state-owned oil company PdV, booked the tanker Star Kestrel today to carry a refined products cargo from the US Gulf coast, according to shipbrokers.

The 51,228 dwt Panamanian-flagged medium range tanker is scheduled to load in the next two days and will travel to the Caribbean island of Aruba, according to multiple shipbrokers. The deal was concluded at a premium rate of $650,000 lump sum, $150,000 above where Argus assesses the route.

Citgo leases a mothballed 280,000 b/d refinery and terminal on Aruba.

The booking was rare as Citgo has been largely absent from the US Gulf coast spot shipping market since the US imposed sanctions on its parent company on 28 January.


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15/10/24

Tax credit delay risks growth of low-CO2 fuels

Tax credit delay risks growth of low-CO2 fuels

New York, 15 October (Argus) — A new US tax credit for low-carbon fuels will likely begin next year without final guidance on how to qualify, leaving refiners, feedstock suppliers, and fuel buyers in a holding pattern. The US Treasury Department this month pledged to finalize guidance around some Inflation Reduction Act tax credits before President Joe Biden leaves office but conspicuously omitted the climate law's "45Z" incentive for clean fuels from its list of priorities. Kicking off in January and lasting through 2027, the credit requires road and aviation fuels to meet an initial carbon intensity threshold and then ups the subsidy as the fuel's emissions fall. The transition to 45Z was always expected to reshape biofuel markets, shifting benefits from blenders to producers and encouraging the use of lower-carbon waste feedstocks, like used cooking oil. And the biofuels industry is used to uncertainty, including lapsed tax credits and retroactive blend mandates. But some in the market say this time is unique, in part because of how different the 45Z credit will be from prior federal incentives. While the credit currently in effect offers $1/USG across the board for biomass-based diesel, for example, it is unclear how much of a credit a gallon of fuel would earn next year since factors like greenhouse gas emissions for various farm practices, feedstocks, and production pathways are now part of the administration's calculations. This delay in issuing guidance has ground to a halt talks around first quarter contracts, which are often hashed out months in advance. Renewable Biofuels chief executive Mike Reed told Argus that his company's Port Neches, Texas, facility — the largest biodiesel plant in the US with a capacity of 180mn USG/yr — has not signed any fuel offtake contracts past the end of the year or any feedstock contracts past November and will idle early next year absent supportive policy signals. Biodiesel traders elsewhere have reported similar challenges. Across the supply chain, the lack of clarity has made it hard to invest. While Biden officials have stressed that domestic agriculture has a role to play in addressing climate change, farmers and oilseed processors have little sense of what "climate-smart" farm practices Treasury will reward. Feedstock deals could slow as early as December, market participants say, because of the risk of shipments arriving late. Slowing alt fuel growth Recent growth in US alternative fuel production could lose momentum because of the delayed guidance. The Energy Information Administration last forecast that the US would produce 230,000 b/d of renewable diesel in 2025, up from 2024 but still 22pc below the agency's initial outlook in January. The agency also sees US biodiesel production falling next year to 103,000 b/d, its lowest level since 2016. The lack of guidance is "going to begin raising the price of fuel simply because it is resulting in fewer gallons of biofuel available," said David Fialkoff, executive vice president of government affairs for the National Association of Truck Stop Operators. And if policy uncertainty is already hurting established fuels like biodiesel and renewable diesel, impacts on more speculative but lower-carbon pathways — such as synthetic SAF produced from clean hydrogen — are potentially substantial. An Argus database of SAF refineries sees 810mn USG/yr of announced US SAF production by 2030 from more advanced pathways like gas-to-liquids and power-to-liquids, though the viability of those plants will hinge on policy. The delay in getting guidance is "challenging because it's postponing investment decisions, and that ties up money and ultimately results in people perhaps looking elsewhere," said Jonathan Lewis, director of transportation decarbonization at the climate think-tank Clean Air Task Force. Tough process, ample delays Regulators have a difficult balancing act, needing to write rules that are simultaneously detailed, legally durable, and broadly acceptable to the diverse interests that back clean fuel incentives — an unsteady coalition of refiners, agribusinesses, fuel buyers like airlines, and some environmental groups. But Biden officials also have reason to act quickly, given the threat next year of Republicans repealing the Inflation Reduction Act or presidential nominee Donald Trump using the power of federal agencies to limit the law's reach. US agriculture secretary Tom Vilsack expressed confidence last month that his agency will release a regulation quantifying the climate benefits of certain agricultural practices before Biden leaves office , which would then inform Treasury's efforts. Treasury officials also said this month they are still "actively" working on issuing guidance around 45Z. If Treasury manages to issue guidance, even retroactively, that meets the many different goals, there could be more support for Congress to extend the credit. The fact that 45Z expires after 2027 is otherwise seen as a barrier to meeting US climate goals and scaling up clean fuel production . But rushing forward with half-formed policy guidance can itself create more problems later. "Moving quickly toward a policy that sends the wrong signals is going to ultimately be more damaging for the viability of this industry than getting something out the door that needs to be fixed," said the Clean Air Task Force's Lewis. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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California passes minimum gasoline reserve bill


14/10/24
News
14/10/24

California passes minimum gasoline reserve bill

Houston, 14 October (Argus) — California governor Gavin Newsom (D) on Monday signed AB X2-1 into law, authorizing the state's energy regulator to require refiners to maintain minimum gasoline inventories. The bill is the latest in a multi-year legislative effort by Newsom to mitigate price spikes at the pump and authorizes the California Energy Commission (CEC) to regulate, develop and impose requirements for in-state refiners to maintain minimum stocks of gasoline and gasoline blending components. The CEC would have the authority to penalize refiners who fail to comply. A minimum road fuels inventory requirement is unprecedented in the US but has been implemented in various forms in Australia, New Zealand, the Philippines and Mexico. While the bill was signed into law Monday, no mandate on refiners is imminent as the CEC will now begin the process of assessing how to structure and implement a minimum reserve rule. Industry group Western States Petroleum Association (WSPA) that has long opposed Newsom's regulation of the oil and gas industry called AB X2-1 a "smokescreen" for impending higher gasoline taxes in California and have previously deemed the minimum stock requirement a misdiagnosis of a broader problem. "You couldn't pay me enough to regurgitate the talking points of WSPA," Newsom said in a press conference today and referred to the industry group and the oil industry at large as the "polluted heart of the climate crisis". By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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High inventories dampen German heating oil demand


14/10/24
News
14/10/24

High inventories dampen German heating oil demand

Hamburg, 14 October (Argus) — Demand for heating oil in Germany fell last week as a result of high consumer stocks, contrary to sellers' expectations of continued buying. Private heating oil tanks were on average 61pc full on 10 October, an increase of almost two percentage points from the same time in 2023 and more than three percentage points from 2022, data from Argus MDX show. Consumers have in recent weeks been taking advantage of lower distillate prices to stock up on heating oil ahead of winter. Heating oil prices in September reached their lowest since June 2023. Although there was a sharp rise in prices at the start of October, sellers experienced another surge in demand. This was driven by consumers buying because of escalating tensions in the Middle East and a subsequent jump in Ice gasoil futures. But demand for heating oil fell significantly in the middle of last week, largely because consumers had stocked up sufficiently and no longer felt the need to buy at a premium. A logistical bottleneck for deliveries further reduced demand. Demand for imported diesel is also decreasing. An economic slowdown in Germany continues to suppress diesel demand. This trend could continue until at least the end of the year, federal government data show. Operators are able to run barges at full capacity. This, coupled with overall low demand, is leading to a fall in freight costs from the Amsterdam-Rotterdam-Antwerp (ARA) hub into Germany. There is increased domestic supply in western Germany. A major supplier at Shell's 334,000 b/d Rhineland refinery resumed spot sales of heating oil and diesel last week, having halted them because of an unplanned unit shutdown. By Natalie Mueller Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Florida fuel supply edging toward normal post-storm


11/10/24
News
11/10/24

Florida fuel supply edging toward normal post-storm

Houston, 11 October (Argus) — Some Florida fuel terminals and a major refined products pipeline expect to restore operations over the weekend thanks to minimal damage from Hurricane Milton, but a return to normal in Port Tampa is being hampered by power outages. Kinder Morgan's Orlando terminal is operational but the company is still assessing its Tampa area terminals and the Central Florida Pipeline (CFPL) after Hurricane Milton made landfall as a category 3 storm late Wednesday, a spokesperson said at 3pm ET Friday. Kinder plans to have its Tampa fuels rack and 16-inch CFPL pipeline online by late Saturday and the 10-inch CFPL pipeline online by the end of the weekend. The company's three Tampa bulk terminals are likely to remain offline Friday due to widespread power outages and damage to the surrounding area. The CFPL pipeline transports gasoline, diesel, ethanol and jet fuel to Orlando, including to Orlando International Airport, and is connected to Kinder's Tampa refined products terminal that has 1.8mn bls of storage. Nearly half of Florida's supply of petroleum and refined products passes through Port Tampa Bay, the majority via waterborne cargo from the US Gulf coast. Port Tampa Bay is still assessing its land and seaside operations, port officials said this morning. It re-opened for limited operations late Thursday having avoided widespread flooding, though power outages in the area remain an issue. Global Partners' Tampa terminal is without power and running on generators, the company said today. Employees are cleaning up minor damage and Global expects the facility to be "fully operational soon". Buckeye Partners' Jacksonville and Fort Lauderdale, Florida, terminals are fully operational and the company is working to restore operations at its two Tampa terminals, a Buckeye spokesperson said today. Chevron is repairing damage at its Tampa terminal, but did not give a time line for a return to normal operations. The company's Port Everglades and Panama City terminals are online and selling fuels, the company said today. Citgo expects its Tampa terminal to restore operations by mid-to-late next week, the company said today. The St Petersburg-Clearwater International airport (PIE) west of Port Tampa is expected to open at 4pm ET Friday according to the Federal Aviation Administration. The Sarasota-Bradenton International Airport further south is expected to reopen early Saturday morning. Miami airport is open and Orlando International resumed commercial flights today. Prices for Florida CBOB delivered at Tampa and Port Everglades fell by 1.87¢/USG to $2.15/USG today. Cash differentials were stable in the Florida gasoline cargo markets at Argus Gulf coast Colonial CBOB +10¢/USG. Prices for Florida ULSD delivered to Port Everglades fell by 0.44¢/USG to $2.39/USG today. Cash differentials were unchanged in the waterborne ULSD cargo markets at Argus Gulf coast Colonial ULSD +12.25¢/USG. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Feds probing fatal Pemex Deer Park accident


11/10/24
News
11/10/24

Feds probing fatal Pemex Deer Park accident

Houston, 11 October (Argus) — The US Chemical Safety and Hazard Investigation Board (CSB) and Occupational Safety and Health Administration (OSHA) are both launching independent investigations into this week's fatal accident at Pemex's 312,500 b/d Deer Park, Texas, refinery. A hydrogen sulfide (H2S) release that killed two workers and injured dozens more occurred on Thursday evening at the plant located near Houston. It also led to shelter-in-place orders for surrounding communities, which have since been lifted. The CSB will investigate the causes of the fatal release, the agency said Friday. The CSB is responsible for investigating industrial accidents in the US, such as the deadly 2022 explosion at BP's Toledo refinery in Ohio and a probe into operations at Marathon's Martinez renewable diesel plant after several fires earlier this year . A representative for CSB was not immediately available for comment. OSHA — charged with enforcing compliance with federal workplace safety laws — is also investigating the incident, and has "up to six months" to complete the investigation, according to an OSHA representative. OSHA would not stop company operations during the duration of the investigation, but "could not speak for other agencies at the site," an OSHA official told Argus. The Harris County Sheriff's department has also opened an investigation into the incident. The release occurred as workers began planned maintenance on a unit. An H2S leak was detected, resulting in several units being shut down as staff sought to secure the leak. The Deer Park refinery had previously been damaged in a February 2023 fire, resulting in two weeks of repairs. A slew of accidents at Deer Park and several other Mexican state-owned Pemex's refineries in part led Fitch Ratings to downgrade Pemex's credit rating in July 2023 . By Gordon Pollock Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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