Jet fuels cargoes heading to Europe from Nigeria's new 650,000 b/d Dangote refinery are putting downward pressure on regional prices, according to market participants.
A BP-purchased cargo was loaded on the Doric Breeze on 25 May at the Dangote refinery, according to sources and ship tracking provider Kpler. The latter said the cargo 45,000t, with an arrival date of 11 June at Rotterdam. BP won a Dangote tender for three jet cargoes totalling 120,000t, according to sources, and Spain's Cepsa has bought one cargo for loading in early June.
Refining premiums against North Sea Dated for jet cargoes delivered to northwest Europe have dropped by $3.31/bl this week to a three-week low of $19.72/bl, as participants expect the additional supply from Nigeria to sufficiently cover the summer uplift in air travel demand.
Dangote started producing what it called aviation fuel for the Nigerian market in January. A sample dated 26 May seen by Argus shows the jet fuel offered from Dangote now probably meets standard European specification A-1. The test contained 254ppm of sulphur, far below the maximum 0.3pc content in jet A-1, and its freezing point was -57ºC, stricter than the European specification of maximum -47ºC.
Weaker margins on jet could prompt refineries towards regrade possibilities for other middle distillates, primarily diesel, traders said. Jet fuel has been at a significant premium over diesel in northwest Europe for the past month, thanks to better demand. But these have weakened by more than half this week, to just $1.10/bl on 30 May from $2.50/bl at the start of the week.
Dangote expects to begin exports of European-standard diesel in June.
