Venezuela exporting methanol via Aruba: Clarification

Clarifies that Metor and Mitsubishi say the ship's transponder remained active.

Venezuela is exporting a steady flow of methanol through ship-to-ship transfers off Aruba, generating a revenue stream that is beyond the scope of direct US sanctions.

Methanol production comes from the 1.6mn t/yr Methanol de Oriente (Metor) complex at Jose, the terminal better known for heavy crude upgrading and blending.

Metor is a joint venture whose main shareholders are Mitsubishi and Mitsubishi Gas Chemical, which together hold 47.5pc, and Venezuelan state-owned petrochemicals subsidiary Pequiven, with 37pc.

The 750,000 t/yr Metor 1 plant and the 850,000 t/yr Metor 2 plant are receiving close to 160mn cf/d of natural gas feedstock that Pequiven receives from its former parent company, Venezuelan state-owned oil company PdV.

The gas comes from PdV's Anaco district in eastern Venezuela, industry officials tell Argus.

According to shipping sources, STS transfers of Venezuelan methanol off the Dutch-controlled island of Aruba are taking place "frequently". As a way to minimize risks and meet insurance needs for shippers and buyers, such near-shore transhipments have grown more commonplace since the US imposed oil sanctions on PdV in January 2019.

In the latest operation, the Panama-flagged Kokuka Glorious loaded methanol in Jose and transferred its cargo in Aruban waters to the Marshall Islands-flagged Fairchem Katana, with departed on 4 April en route to Rotterdam.

The former vessel was scheduled to have returned to Jose on 5 April but at the time did not appear on vessel-tracking services, which often indicates a transponder has been turned off. (After publication of this story, Metor and Mitsubishi said the ship's transponder was not turned off, citing the shipowner.)

Among its many uses, methanol is a component of MTBE, which PdV traditionally used to manufacture gasoline. Nearly all of PdV's refining capacity is shut down after years of neglect and a lack of spare parts and crude feedstock, contributing to an acute fuel shortage.

Venezuela's methanol exports coincide with shutdowns and curtailments by other producers as a result of weak global demand. In nearby Trinidad and Tobago, top producer Methanex idled its 850,000 b/d Titan plant and more recently its 800,000 t/yr Chile 4 plant in southern Chile. The Canadian company also deferred a $500mn project in Louisiana.

Petchem past

Underpinned by abundant gas supply, Venezuela once had a thriving petrochemicals industry, based in the El Tablazo complex in the western state of Zulia, the Moron complex outside Valencia and the Jose plants. With the exception of Metor, nearly all the plants are off-line or operating at low levels.

Other petrochemical plants at Jose include Pequiven's stalled 820,000 t/yr Supermetanol joint venture with Italy's Eni, and the Fertinitro complex, in which one of two urea and ammonia trains is currently operating. The 580,000 t/yr Superoctanos plant that produces MTBE is operating sporadically at best because of broken equipment.

Neither Pequiven nor Mitsubishi could be reached for comment.

Metor's exports are not subject to US sanctions, and Pequiven does not receive dividends from the venture because of US financial sanctions on Venezuela, in place since August 2017. But because of Venezuelan state shareholding, the parties involved in the trade are "sanctionable", a US official tells Argus.

A suite of US sanctions on Venezuela is aimed at forcing out President Nicolas Maduro to make way for new elections.

By Patricia Garip