Venezuelan LPG grows as scarce as gasoline

  • Market: LPG
  • 30/07/20

LPG supply in Venezuela is growing nearly as scarce as gasoline as state-owned PdV struggles to resolve operational problems at its 200,000 b/d Jose Cryogenic Complex.

The complex is currently producing about 33,000 b/d of gas liquids including 13,000 b/d of propane or about a fifth of estimated national demand of 60,000 b/d, according to two PdV officials and a technical report seen by Argus.

Gas liquids output at Jose has fallen from 40,000 b/d at the end of May, including 15,000 b/d of propane.

The Jose complex produces all of Venezuela's propane traditionally used for cooking. In the face of shortages, many Venezuelans resort to electric hotplates or firewood.

The government is prioritizing deliveries to Caracas, but the oil ministry concedes that even in the capital up to 85pc of households lack supply.

Among the problems at Jose are damaged pipelines, faulty valves, broken compressors and impaired storage tanks.

PdV also is having equipment problems at its upstream extraction operations in the San Joaquin-Anaco areas of Anzoategui and associated gas production from the Santa Barbara and Jusepin oil fields in Monagas state, the report adds.

PdV lacks replacement parts and skilled labor to repair equipment at the cryogenic complex where only one of four 50,000 b/d trains is partially operating, the PdV officials said.

Repair crews have been cannibalizing parts from the other trains in an effort to increase output at the only operational train and restart a second train that would enable PdV to raise LPG production to about 80,000 b/d, including up to 30,000 b/d of propane.

PdV has effectively abandoned its Ule and Bajo Grande extraction plants in the western state of Zulia where historically low crude output has dried up associated gas production.

The report adds that unstable electricity supply is "a constant impediment" to Jose operations.

"US sanctions have blocked access to foreign parts suppliers, PdV cannot get credit and oil export income has plummeted," one of the PdV officials said. "We're anticipating oil export revenues of about $5bn in all of 2020, so LPG imports are not an option either at this time unless we find suppliers willing to swap LPG for heavy crude."

PdV currently swaps crude for diesel, making use of a diesel exemption in the US sanctions that is currently under review. With PdV's refineries mostly down and Iranian imports exhausted, gasoline has nearly run out.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
09/04/24

Panama Canal to restrict May transits on work

Panama Canal to restrict May transits on work

New York, 9 April (Argus) — Maintenance at the Panama Canal for the Panamax locks, responsible for around 70pc of all ship crossings at the waterway, will cut the daily number of vessel transits through these locks for nine days in mid-May, the Panama Canal Authority (ACP) said today. The ACP said it will reduce Panamax lock transits from 7 May to 14 May by three to a total of 17. The cuts entail two fewer "super" category slots for vessels like medium range (MR) tankers and Supramax bulkers and one fewer "regular" category slot for smaller vessels. An additional day of downtime "allowing 24 hours for unforeseeable maintenance delays" will put the projected end-date for maintenance and the return to 20 total Panamax lock transits on 16 May, according to the ACP, constituting a nine-day reduced-transit period that should drop total transits in the period by around 27 vessels. The potential for heightened competition amid a backlog of vessels vying to transit during this time could be mitigated by assigning "additional transits per day for each vessel category" based on the canal's "daily water consumption quota", according to the ACP. "These additional slots may be assigned to booked vessels that have already arrived at canal waters," the ACP said. "This measure is a temporary service subject to operational assessment, open to all vessel types based on the arrival date." The maintenance will primarily target the west lane of the Gatun locks, where ships enter the Panama Canal from the Atlantic basin, while the ACP noted that the east lane of the Miraflores locks on the Pacific side will undergo a simultaneous maintenance period from 11-12 May. Panamax lock transit auction prices hit low The average cost for ship operators to win an auction to transit the Panama Canal via the Panamax locks hit its lowest level Monday since Argus began the assessment in January on lower demand, particularly for dry bulkers utilizing alternative routings, and an uptick in auction slots in early March . "Since the peak period last year, auction prices have leveled off. They are generally near normal levels today," said the ACP. The rate for a Panamax lock auction dropped by $14,173 to $94,314, the lowest average price to transit since 26 January and representing a drop of $450,936 from the high hit on 5 February on a jump in demand ahead of lunar new year holidays across Asia-Pacific. Of the smaller dry bulkers that can fit in the Panamax locks, only 34 Handysize, 38 Supramax, and 31 Ultramax bulkers transited the Panama Canal in March compared with the 92 Handysize, 66 Supramax, and 88 Ultramax bulkers that transited in March 2023, the lowest number of transits in March for these segments through 2017, according to Kpler data. Dry bulk Panama Canal transits down, tanker transits stabilizing The share of dry bulkers utilizing the Panamax locks at the Panama Canal was at 15.2pc of total transits in February, down from the 25.5pc share that dry bulkers held in September 2023, according to ACP data, before the ACP instituted daily vessel restrictions and the current prebooking/auction slot system supplanted the previous, first-come, first-serve waiting system in late October 2023. Meanwhile, 149 MR tankers transited in March, down from the 169 that transited in the same period the year prior but up from the 107 MRs that crossed the canal in February. MR transits have risen every year in March, according to Kpler, as west coast South America diesel demand jumps on the resurgence of refinery utilization in the US Gulf coast after the first quarter turnaround season draws to a close. Crude, product, and chemical tanker transits rose by 1.7 percentage points to 30.3pc, making up the plurality of all Panamax lock transits collectively in February from September 2023, according to ACP data. The uptick in available Panamax lock auctions in early March has likely offset the steady demand for these vessels and contributed to the downward pressure on auction prices, while the reduced transits during the upcoming nine days of maintenance could reverse this trend in the short term. ACP expects transit restrictions to lift by 2025 In the long term, the Panama Canal expects a return to normalcy within the next two years, beginning with the start of the rainy season in the coming weeks. "Current forecasts indicate that steady rainfall will arrive in late April and continue for a few months," the ACP said today. "If this remains the case, the canal plans to gradually ease transit restrictions, allowing conditions to fully normalize by 2025." By Ross Griffith Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Read more
News

Texas oil, gas drilling permits slide by 33pc in March


08/04/24
News
08/04/24

Texas oil, gas drilling permits slide by 33pc in March

Calgary, 8 April (Argus) — Texas drilling permits for oil and natural gas fell in March by 33pc from a year earlier on declines across all major producing regions. There were 669 permits issued in March for drilling oil, drilling gas, or drilling for both oil and gas across the state, according to the Texas Railroad Commission (RRC), down from 999 in the same month last year. Permits ticked higher from the 659 recorded in February. The year-on-year drop was led by the Midland region, or District 8 , where permits fell in March to 328, down by 133 permits from a year earlier, and lower by five compared to February. Also down from a year earlier were permits issued in the San Angelo region, or District 7C, to the immediate southeast of Midland. The regulator issued 60 permits there in March, lower by 39 from March 2023 but up from 42 permits in February. The westernmost San Antonio region, or District 1, saw permits slide to 79 in March from 166 a year earlier. This was also down from 95 in February. WTI crude prices at Cushing, Oklahoma, averaged $80.41/bl in March, higher by $7.03 from the same month last year, while average spot natural gas prices at Henry Hub fell by 55pc in the same period to $2.30/mmBtu. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

France Port Jerome refinery restart likely in early May


08/04/24
News
08/04/24

France Port Jerome refinery restart likely in early May

Barcelona, 8 April (Argus) — Workers at ExxonMobil's 236,000 b/d Port Jerome refinery in northern France said today the plant is likely to resume operations in May, following a fire there earlier in the year. "We think it could restart in early May if everything goes to plan," said a worker today. The fire in a crude distillation unit (CDU) at the start of March halted operations , and injured workers and members of the fire service. The 1.15mn b/d French downstream complex had a period of around six months in the second half of 2023 when it ran without any incident, the first time in around four years. This ended at the end of last year when TotalEnergies' 219,000 b/d Donges refinery, on the Atlantic coast, halted after inspections by local authorities. By Adam Porter Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Hattiesburg propane trading jumps on Dixie line work


05/04/24
News
05/04/24

Hattiesburg propane trading jumps on Dixie line work

Houston, 5 April (Argus) — Propane spot trading activity surged at Hattiesburg, Mississippi, this week as market participants prepared for maintenance on a segment of Enterprise Products Partners' 1,300-mile natural gas liquids (NGL) Dixie pipeline. Distributors sold 215,000 bl of Hattiesburg spot propane this week, nearly triple the 74,500 bl sold in the previous week and nearly quadruple the same period last year, when only 58,500 bl transacted coming off of heating season. "There is a need to get barrels out of the line into storage," according to a retailer in the region. Enterprise will perform hydrostatic testing in compliance with federal regulations on the segment of the pipeline between Opelika, Alabama, and Milner, Georgia, starting on 28 May. The outage is expected to last approximately 45 days but may be extended depending on the findings of the inspection. The Apex terminal in North Carolina will likely serve as a distribution location for the northern portion of the line during the work, the retailer said. Hattiesburg pricing, which typically trades at a discount to the benchmark hub at Mont Belvieu, Texas, fell further this week as market participants offloaded surplus line volumes. Hattiesburg propane averaged 80¢/USG in March, a 1.79¢/USG discount to Mont Belvieu, Texas, LST propane, and has extended losses into April. Hattiesburg propane fell from 79.5¢/USG to 75¢/USG during the first week of April, widening its discount to Mont Belvieu propane to 10.875¢/USG, the largest discount between the two locations seen since February 2021. Demand for propane at the Hattiesburg terminal is expected to remain low owing to seasonally low demand and restricted transportation during the testing period for the Dixie pipeline. By Abby Downing-Beaver Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Trucking waivers extended for Baltimore bridge


05/04/24
News
05/04/24

Trucking waivers extended for Baltimore bridge

Houston, 5 April (Argus) — Federal officials will allow truckers rerouted by the the collapse of the Francis Scott Key Bridge in Baltimore, Maryland, to temporarily drive longer hours than laws permit. The Federal Motor Carrier Safety Administration (FMCSA) extended an hours-of-service waiver for commercial vehicles transporting commodities on routes disrupted by the accident and those involved in reopening the port. Under the emergency declaration, a maximum 11-hour driving time has been extended to 13 hours and will remain in effect until either 9 May or the end of the emergency, FMCSA said. The hours-of-service waiver applies to trucks transporting gasoline, ethanol, propane, natural gas and heating oil from Baltimore's Curtis Bay terminal for delivery to ten locations detailed in the declaration . Trucks transporting freight, shipping containers, automobiles or other equipment such as heavy duty machinery have also been granted hours-of-service relief. The bridge collapse has rerouted gasoline cargoes in the Baltimore area since the product cannot be transported through the Fort McHenry (I-95) and Baltimore Harbor (I-895) tunnels — the two other major roads that cross the Patapsco River at Baltimore. The harbor's channel will be partially reopened to a depth of 35ft by the end of April and will fully reopen by the end of May, the Maryland Port Administration said on Thursday . Rebuilding the bridge will likely take many years. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more