North Sea heavy crude heads to US Gulf

Two cargoes of heavy North Sea crude are scheduled to arrive in the US Gulf coast in early December following ship-to-ship (STS) transfers at Scapa Flow, offshore Scotland, this week.

The two cargoes are already en route. The 600,000 bl Texas Star was scheduled to arrive at Port Arthur, Texas, on 14 December after taking on board a cargo of Kraken crude via STS at Scapa Flow. The 600,000 bl Amalthea was signalling Southwest Pass, a channel at the mouth of the Mississippi river, after loading with Captain crude.

Crude from the Chevron-operated Captain field regularly sails to the US, in particular to St James, Louisiana — which lies on the Mississippi. Captain crude has a gravity of around 19°API and sulphur content of 0.7pc and loads from its own floating production, storage and offloading (FPSO) vessel on to shuttle tankers.

The 50,000 b/d Kraken field has been in production since September, and at least one cargo of the crude has already reached US shores. In mid-September, the first cargo of Kraken crude to load headed to the US Gulf after an STS at Scapa Flow. The 600,000 bl Minerva Atlantica delivered the crude to Pascagoula, Mississippi, where Chevron operates a 330,000 b/d refinery. The Kraken field, which produces crude of 13.7°API, is operated by London-listed upstream independent Enquest.

A wide North Sea premium to US marker WTI would suggest that such flows are unlikely to rise, but niche heavy grades such as Captain and Kraken appear to be the exception. Since the beginning of September North Sea Dated's premium over WTI has averaged $6/bl, compared with $1.74/bl in the first half of the year.