Milazzo to receive more Venezuelan crude: Update
adds Eni comment
Italy's 235,000 b/d Milazzo refinery, jointly run by domestic integrated firm Eni and Kuwait's state-owned KPC, is preparing to receive its second cargo of Venezuelan crude in the space of a month.
The Delta Captain is waiting to discharge around 750,000 bl, according to Argus tracking data. It comes after sister ship the Delta Tolmi delivered 470,000 bl around 5 July, the first Venezuelan crude at Milazzo since February 2019.
The Delta Captain took receipt of the Venezuelan crude via a ship-to-ship transfer in the harbour at Augusta, Sicily around 29 July. It took the oil from the Bouboulina, which sailed on with the remainder of the cargo to Genoa.
Eni engages in Venezuelan crude-for-diesel swaps and debt recovery arrangements through an exception to US sanctions. The company is a 50pc partner with Spain's Repsol at Venezuela's offshore Perla gas field, where state-owned PdV pays for production with crude supply.
"Eni has been recovering its receivables with PdV related to Perla gas sales through crude supplies, abiding by the relevant legal framework and in continuous dialogue with Italian, EU and US authorities, " Eni told Argus.
"As part of this credit recovery scheme, Eni is giving back to PdV part of the value in diesel. Such transactions are also duly monitored and carried out in full compliance of all applicable laws, and in close contact with competent authorities and will be maintained in the future as long as they will be considered to be fully compliant with applicable international rules."
Overall crude receipts at Milazzo increased to 110,000 b/d last month from just 90,00 b/d in June, according to Argus tracking. Deliveries averaged 145,000 b/d in the first seven months of the year, around 60pc of capacity.
July's imports included 35,000 b/d of US WTI, a little over 20,000 b/d each of Iraqi Basrah Light and Baltic Urals, and 10,000 b/d of Nigerian Forcados. The rest was made up of the Venezuelan crude.
Argus assessed Milazzo's crude receipts at a weighted average gravity of 31.5°API and sulphur content of 1.2pc in July, compared with 33.7°API and 1.2pc in June and 32.4°API and 1.7pc in May.
The refinery shipped a 225,000 bl naphtha cargo to the French port of Fos-Lavera last month, taken by Total and UK-Chinese venture Petroineos probably to run at their Naphthachimie petrochemical unit at the port.
There is little sign that the pace of crude receipts at Milazzo is increasing this month. Besides the Delta Captain, a single cargo of around 600,000 bl of Kazakh CPC Blend is due to discharge, with no other tankers signalling arrival.
Related news posts
Cenovus boosts oil sands output by 4pc in 1Q
Cenovus boosts oil sands output by 4pc in 1Q
Calgary, 1 May (Argus) — Canadian integrated Cenovus Energy increased its oil sands production by 4pc in the first quarter, led by gains at Lloydminster Thermal and Foster Creek heavy crude assets, and the company plans to boost output further to supply the newly opened Trans Mountain Expansion (TMX) pipeline. Cenovus pumped out 613,000 b/d of crude from its oil sands projects in Alberta, up from 588,000 b/d in the same quarter last year, the Calgary-based company reported on Wednesday. This was one of the highest producing quarters for Cenovus' oil sands assets since acquiring Husky in early 2021, second only to the 625,000 b/d produced in the fourth quarter that year. Cenovus has a commitment of about 144,000 b/d on the newly completed 590,000 b/d TMX pipeline, which was placed into service on Wednesday , and the company has plans to push upstream output higher over the next several years across its portfolio to meet its commitment. The pipeline nearly triples the amount of Canadian crude that can reach the Pacific coast without first having to go through the US. First-quarter production from the Lloydminster Thermal segment rose to 114,000 b/d, up from 99,000 b/d a year earlier, because of higher reliability, according to Cenovus. Cenovus' Foster Creek production rose to 196,000 b/d of bitumen, up from 190,000 b/d in first quarter 2023. The company plans to bring another 30,000 b/d online at the steam-assisted gravity drainage (SAGD) asset by the end of 2027 through optimization projects. To the north, Christina Lake's first-quarter bitumen output of 237,000 b/d was steady with previous quarters. The asset is expected to get a significant boost by the end of 2025 when a pipeline connecting the project to output from the neighbouring Narrows Lake asset is completed. The 17 kilometer (11 mile) Narrows Lake tie-back will add 20,000-30,000 b/d of bitumen to Christina Lake, which already ranks as the industry's largest SAGD project. The pipeline is 67pc complete and should be placed into service in early 2025, Cenovus executives said Wednesday on an earnings call. Northeast of Fort McMurray, Alberta, new well pads are planned at Sunrise in 2025, where Cenovus also plans to push production higher by 20,000 b/d. Sunrise produced an average of 49,000 b/d in the first quarter this year, up from 45,000 b/d in the same quarter 2023. Cenovus' output company-wide rose to 801,000 b/d of oil equivalent (boe/d) in the first quarter, up from 779,000 boe/d a year earlier. This includes oil sands, natural gas liquids, natural gas, conventional and offshore assets. Cenovus posted a profit of C$1.2bn ($871mn) in the quarter, up from a C$636mn profit during the same quarter of 2023. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Tankers can take TMX crude mid-May: Trans Mountain
Tankers can take TMX crude mid-May: Trans Mountain
Calgary, 1 May (Argus) — Commercial operations for the 590,000 b/d Trans Mountain Expansion (TMX) crude pipeline in western Canada have officially started today, but tankers will not be able to load crude from the line until later this month. Line fill activities, which began on 16 April, are still ongoing for the C$34bn ($25bn) project that stretches from Edmonton, Alberta, to the docks in Burnaby, British Columbia. About 70pc of the volumes needed are in the 1,181 kilometre (733 mile) line, Trans Mountain said on Wednesday. "As of today, all deliveries for shippers will be subject to the Expanded System tariff and tolls, and tankers will be able to receive oil from Line 2 by mid-May," Trans Mountain said. Aframax-size crude tankers started to take position on the west coast last month in anticipation of the new line. But the inability to deliver crude at Burnaby, while still having to pay full tolls, was a concern raised by several shippers on 23 April. "Trans Mountain must be able to receive, transport and deliver a shipper's contract volume," the shippers said in a letter to the CER. The ability to deliver the crude is "clearly central and fundamental qualities of firm service." The CER in November approved interim tolls for the system that will further connect Albertan oil sands producers to Pacific Rim markets. Shippers will, at least initially, pay C$11.46/bl to move crude from Edmonton, Alberta, to the Westridge terminal in Burnaby, British Columbia. The fixed portion accounts for C$10.88/bl of this and has nearly doubled from a C$5.76/bl estimate in 2017. The Canada Energy Regulator (CER) on 30 April gave Trans Mountain a green light to put TMX into service , ending years of uncertainty that the project would ever be completed. The expansion project, or Line 2, nearly triples the capacity of Canadian crude that can flow to the Pacific coast, complementing the original 300,000 b/d line, or Line 1, that has been operating since 1953. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Canada’s TMX pipeline ready to move crude: Update
Canada’s TMX pipeline ready to move crude: Update
Adds regulatory approvals received. Calgary, 30 April (Argus) — Canada's 590,000 b/d Trans Mountain Expansion (TMX) crude pipeline can now start moving volumes to the Pacific coast after receiving final regulatory approvals today, more than a decade after the project was first conceived. The Canada Energy Regulator (CER) approved Trans Mountain's final applications on Tuesday, giving the midstream company a green light to put its C$34bn ($25bn) project into service. Trans Mountain had recently maintained its commitment to being ready by 1 May. The expansion nearly triples the existing 300,000 b/d Trans Mountain line that runs from Edmonton, Alberta, to Burnaby, British Columbia. Also expanded was the Westridge Marine Terminal from one dock to three, all capable of loading Aframax-sized vessels. The line will provide Canadian oil sands producers with a significant export outlet without having to first go through the US. Much of the new volume to flow on TMX is expected to be heavy sour crude. Federally-owned Trans Mountain had submitted applications as recent as 15 April for the final section of the pipeline about 140 kilometers (87 miles) east of the line's terminus in Burnaby. The final applications concerned piping, valves and other components at two pipeline inspection device traps and the mainline pipe between the two traps. The traps were added for safety assurance when the operator was allowed by CER to use a smaller diameter pipe as part of the Mountain 3 deviation. Mountain 3 was the last segment of the pipeline to be constructed because of delays relating to difficult terrain while tunneling. The "golden weld" marking the end of construction occurred on 11 April, according to Trans Mountain. A group of shippers last week expressed concern that TMX would not be ready for commercial service by 1 May. The pipeline had been marred by legal challenges and cost over-runs since it was first proposed in 2013 by its then-owner US midstream firm Kinder Morgan. The Canadian government took ownership of it in 2018. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
New US rule may let some shippers swap railroads
New US rule may let some shippers swap railroads
Washington, 30 April (Argus) — US rail regulators today issued a final rule designed to help customers switch railroads in cases of poor rail service, but it is already drawing mixed reviews. Reciprocal switching, which allows freight shippers or receivers captive to a single railroad to access to an alternate carrier, has been allowed under US Surface Transportation Board (STB) rules. But shippers had not used existing STB rules to petition for reciprocal switching in 35 years, prompting regulators to revise rules to encourage shippers to pursue switching while helping resolve service problems. "The rule adopted today has broken new ground in the effort to provide competitive options in an extraordinarily consolidated rail industry," said outgoing STB chairman Martin Oberman. The five-person board unanimously approved a rule that would allow the board to order a reciprocal switching agreement if a facility's rail service falls below specified levels. Orders would be for 3-5 years. "Given the repeated episodes of severe service deterioration in recent years, and the continuing impediments to robust and consistent rail service despite the recent improvements accomplished by Class I carriers, the board has chosen to focus on making reciprocal switching available to shippers who have suffered service problems over an extended period of time," Oberman said today. STB commissioner Robert Primus voted to approve the rule, but also said it did not go far enough. The rule adopted today is "unlikely to accomplish what the board set out to do" since it does not cover freight moving under contract, he said. "I am voting for the final rule because something is better than nothing," Primus said. But he said the rule also does nothing to address competition in the rail industry. The Association of American Railroads (AAR) is reviewing the 154-page final rule, but carriers have been historically opposed to reciprocal switching proposals. "Railroads have been clear about the risks of expanded switching and the resulting slippery slope toward unjustified market intervention," AAR said. But the trade group was pleased that STB rejected "previous proposals that amounted to open access," which is a broad term for proposals that call for railroads to allow other carriers to operate over their tracks. The American Short Line and Regional Railroad Association declined to comment but has indicated it does not expect the rule to have an appreciable impact on shortline traffic, service or operations. Today's rule has drawn mixed reactions from some shipper groups. The National Industrial Transportation League (NITL), which filed its own reciprocal switching proposal in 2011, said it was encouraged by the collection of service metrics required under the rule. But "it is disheartened by its narrow scope as it does not appear to apply to the vast majority of freight rail traffic that moves under contracts or is subject to commodity exemptions," said NITL executive director Nancy O'Liddy, noting it was a departure from the group's original petition which sought switching as a way to facilitate railroad economic competitiveness. The Chlorine Institute said, in its initial analysis, that it does not "see significant benefit for our shipper members since it excludes contract traffic which covers the vast majority of chlorine and other relevant chemical shipments." By Abby Caplan 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