Guaido team promises fuel surge in Venezuela
Venezuela's US-backed political opposition is promising to restore stable fuel supply in two weeks if it takes power, kicking off with crude-for-products swaps.
In an initial stage, such swaps would be carried out with Citgo, the US refining arm of Venezuela's US-sanctioned national oil company PdV. Gasoline and diesel could also come from neighboring Colombia or other suppliers with storage in nearby Caribbean islands Curacao and Aruba, where PdV used to lease assets.
According to the opposition's rough fuel supply blueprint, called Plan Pais, 100,000 b/d of gasoline and 40,000 b/d of diesel, plus 1.4mn bl of inventory, would be reestablished through a monthly contingent of 13 tankers holding 340,000 bl apiece, for approximately $140mn. An addition four tankers would replenish stocks, worth another $50mn at an indicative price of around $30/bl.
One challenge to the plan is the volume of crude that Venezuela would be able to offer in the short term. At a nominal price of $30/bl for Venezuela's 16°API Merey crude, a swap for the products would require around 420,000 b/d of production, which is close to the Opec country's current average of 500,000-600,000 b/d. PdV is already committed to servicing a number of oil-backed loans, mainly to China.
In a supplier-to-pump logistics timeframe outlined in the blueprint, the imports would take 6-7 days from the US Gulf coast or 2-3 days from Curacao or Aruba. Internal distribution would need another 5-7 days. The supply would tide over Venezuela until PdV's main refineries, the 635,000 b/d Amuay and the 305,000 b/d Cardon, are repaired. Pump prices would be gradually raised, with targeted subsidies for the most vulnerable.
Plan Pais would be implemented after the departure of President Nicolas Maduro, who has steadfastly resisted US sanctions and opposition efforts to force him out.
The thrust of the strategy was presented today by former PdV board member and Plan Pais technical team member Jose Toro Hardy and National Assembly deputy Elias Matta, who heads the body's oil commission.
The Maduro government is currently in the second choppy week of a rationing and pricing system for gasoline that was recently delivered by Iran. On paper, subsidized gasoline is offered at most retail stations, with about 200 earmarked for sales at international prices. The rollout has been chaotic, although supply in Caracas appears to be stabilizing for now, with shorter or no lines and swifter payment.
For the opposition, the current system is prone to corruption and will soon collapse because Venezuela will run out of Iranian supply and PdV's barely functioning refineries are still not producing usable fuel.
Citgo to court
Houston-based Citgo, which has 750,000 b/d of capacity in three refineries in Texas, Louisiana and Illinois, used to absorb a large share of Venezuela's crude production. But since the US imposed oil sanctions on Venezuela in January 2019, the company has turned to other suppliers such as Colombia.
Citgo is nominally administered by the opposition led by Juan Guaido since early 2019. The US Treasury Department controls its revenue and is protecting the assets from Venezuela's myriad creditors, including Tenor Capital Management which inherited a $1.2bn arbitration award from defunct Canadian gold mining firm Crystallex.
Next week in a Delaware district court, lawyers for Tenor and Guaido are scheduled to file proposals to sell shares in Citgo's parent company, PdV Holding, to satisfy the Crystallex claim.
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TMX oil specs inappropriate: Valero, Chevron
TMX oil specs inappropriate: Valero, Chevron
Calgary, 13 May (Argus) — Crude quality specifications on the Trans Mountain Expansion (TMX) pipeline in western Canada are not narrow enough and may prevent buyers in California from taking crude shipped on the recently commissioned system, according to two US refiners. The 590,000 b/d TMX pipeline was placed into service on 1 May, a welcome addition for both producers in Alberta and refiners on the Pacific rim, but the upper limits allowed for crude on the line relating to vapor pressure and Total Acid Number (TAN) are problematic, Chevron and Valero said in letters to the Canada Energy Regulator (CER) on 10 May. The specifications, as set out by Trans Mountain's rules and regulations, were already in place for the original 300,000 b/d crude pipeline, or Line 1, which also carries refined products that require a higher vapor pressure. TMX, or Line 2, will primarily cater to heavy crude shippers. But the vapor pressure limit of 103 kPa at 37.8°C on the new line is nearly 40pc higher than tanks allow, according to Valero. "High vapor pressure crude oil simply cannot be accepted in United States internal floating roof tanks," wrote Valero. The current limits are "wholly inappropriate" and will result in crude being transported through TMX that is not suitable for the west coast market. Chevron concurred that the specifications exceed the limit for storage tanks at its own California refineries in Richmond and El Segundo. "Failure to amend the TAN specification and vapor limits for TMPL may prevent Chevron from purchasing or processing crude from [Trans Mountain] for our California refineries," the company wrote. The letters were in support of a 12 April complaint by Canadian Natural Resources (CNRL) to the CER, requesting the regulator intervene. Fellow oil sands producers Suncor, Imperial Oil, MEG Energy and ConocoPhillips also wrote in support, as did industry groups Explorers and Producers Association of Canada (EPAC) and Western States Petroleum Association (WSPA). Current rules state crudes must have a TAN of less than 1.3mg KOH/g to be considered a Low TAN Dilbit, but that is "inappropriately high," according to CNRL, and should be brought down to the same 1.1mg KOH/g threshold set by other export pipelines. Cenovus and Plains Midstream wrote that the CER did not need to intervene as this was a commercial matter. "This is effectively a commercial dispute that should be dealt with between the sophisticated commercial entities involved," said Plains. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Potential strike threatens Vancouver port again
Potential strike threatens Vancouver port again
Calgary, 13 May (Argus) — A labour dispute at the Canadian port of Vancouver could result in another work stoppage, less than a year after a strike disrupted the flow of more than C$10bn ($7.3bn) worth of goods and commodities ranging from canola and potash to coking coal. Negotiations between the British Columbia Maritime Employers Association (BCMEA) and the International Longshore and Warehouse Union (ILWU) Ship and Dock Foremen Local 514 union have stalled as the two sides try to renew an agreement that expired on 1 April 2023. A 21-day "cooling-off period" concluded on 10 May, giving the union the right to strike and the employers association the right to lock out the workers. A vote and 72-hour notice would first need to occur before either action is taken. The BCMEA filed a formal complaint to the Canada Industrial Relations Board (CIRB) the same day, which had to step in last year in another dispute. The BCMEA locked horns with ILWU Canada over a separate collective agreement in 2023 leading to a 13-day strike by the union in July. This disrupted the movement of C$10.7bn of goods in and out of Canada, according to the Greater Vancouver Board of Trade. Vancouver's port is the country's largest — about the same size as the next five combined — and describes itself as able to handle the most diversified range of cargo in North America. There are 29 terminals belonging to the Port of Vancouver. Terminals that service container ships endured the most significant congestion during last year's strike. Loadings for potash, sulphur, lumber, wood pellets and pulp, steel-making coal, canola, copper concentrates, zinc and lead concentrate, diesel and renewable diesel liquids and some agri-foods were also disrupted. The Trans Mountain-operated Westridge Marine Terminal responsible for crude oil exports on Canada's west coast was unaffected. A deal was eventually reached on 4 August. The strike spurred on proposed amendments to legislation in Canada that would limit the effect of job action on essential services. A bill introduced in Canada's Parliament in November would update the Canada Labour Code and CIRB Regulations accordingly. The bill has been progressing through the House of Commons, now having completed the second of three readings. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Chevron books Aframax for TMX cargo to California
Chevron books Aframax for TMX cargo to California
Houston, 13 May (Argus) — Chevron provisionally hired an Aframax to haul a cargo of crude from Vancouver, British Columbia, to the US west coast as the Trans Mountain Expansion (TMX) brings more oil to Canada's Pacific coast. Chevron put the Aframax Garibaldi Spirit on subjects for a Vancouver-US west coast voyage loading from 25 May at WS125, market participants said. That rate is equivalent to $11.16/t or $1.63/bl for heavy sour Cold Lake, according to Argus data. The US west coast historically has been the main destination for crude exported from Vancouver, with 96pc, or about 38,500 b/d, landing at ports in Washington and California in the 12 months ended 30 April, according to data from analytics firm Vortexa. Chevron purchased five cargoes from Vancouver for its 269,000 b/d refinery in El Segundo, California, during that span, most recently in February. The 590,000 b/d TMX project began commercial service on 1 May, tripling the capacity of the Trans Mountain pipeline system to 890,000 b/d. The line creates a larger link from Alberta's growing oil sands production to the west coast port of Vancouver and direct access to Pacific Rim markets, where buyers are eager for heavy sour crude . The first TMX cargo, 550,000 bl of Canadian Access Western Blend which Suncor booked on an Aframax in late April , will load between 18-24 May for June delivery in China. PetroChina and Unipec each control an Aframax near Canada's Pacific coast that would be available to load in Vancouver in the second half of May, though those ships could also be relet to deliver crude to the US west coast. The port of Vancouver's distance from many traditional Aframax trading routes may stretch the global fleet once TMX ramps up. The port cannot accommodate tankers larger than Aframaxes. By Tray Swanson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Rains persist in Brazil's Rio Grande do Sul
Rains persist in Brazil's Rio Grande do Sul
Sao Paulo, 13 May (Argus) — Downpours that began flooding Brazil's heavily agricultural Rio Grande do Sul in late April persisted over the weekend, continuing to wreak havoc in the state. Rains reached an accumulated 123mm (4.8 inches) on 10-12 May in state capital Porto Alegre, according to Brazil's national meteorological institute Inmet. Some areas experienced around 80mm of rain on 12 May alone, according to US National Oceanic and Atmospheric Administration. Showers in Porto Alegre have reached an accumulated 502mm in May already, according to Brazilian meteorological firm Climatempo. The monthly average is of 111mm. River and lake levels also kept rising. The Guaiba lake, in the state's capital, reached 4.9m (16ft) on Monday morning — up from 4.8m on 10 May, according to the state government. It is considered in a flood stage once it reaches 3m. Most rivers in the state, such as the Gravatai, Taquari and Uruguai, are also above flood levels. A bridge over the Cai River, which links Nova Petropolis and Caxias do Sul cities, broke partially on Sunday. As a result, a stretch of the BR-116 highway is closed, according to the national department of transport infrastructure. The river's levels are 6m above normal. Brazil's national center for natural disaster monitoring and alerts still considers the risk of "new hydrological occurrences" to be "very high" in Rio Grande do Sul and neighboring Santa Catarina state. The extreme weather has left 147 dead and 127 missing, according to the civil defense. Over 538,000 people are displaced. By Lucas Parolin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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