Sudan Crude Heading To Asia, Pressuring Minas Premiums
Dow Jones Energy Service, September 1
SINGAPORE (Dow Jones)--Nile blend crude that Sudan began pumping into
tankers in the Red Sea Monday is heading toward Asia, pressuring premiums
for East Asian grades such as Minas and Daqing, Asian traders said
Wednesday.
A South Korean refiner and a European oil major with a refinery in
Singapore will be taking the first two Nile Blend cargoes to load, the
traders said, although this couldn't be confirmed with Netherlands-based
trading firm Trafigura Beheer BV, the marketer of the crude.
Some traders said a third cargo of Nile Blend will be taken up by
Thailand's largest refiner, Thai Oil Co. Ltd., which also couldn't be
confirmed. Thai Oil owns a 220,000- barrels-a-day refinery in Sri Racha.
However, the extent of the pressure on regional premiums is unclear, one
Seoul-based refining source said, since the Asian buyers aren't the
primary target for the crude.
The source said the main marketing targets are buyers in the Mediterranean
or in South America.
Another trader with a European oil major in Tokyo said the pressure on the
regional premiums is also unclear because of the recent volatility in the
October Brent-Dubai spread.
Last week, the spread hit a low of about 60-70 cents, and some Asian
buyers bought a few parcels of West African crude, traders said.
With the Minas premiums then at 30-40 cents to the Minas Indonesian crude
pricing index, traders began forecasting that this week's premiums would
shrink to 20-30 cents.
This week, when the October Brent-Dubai spread jumped to 90-95 cents
before falling back to 70-80 cents, traders said the Asian buyer stepped
out of the market to see where the spread would settle.
"Fundamentally, the buyers in the east are trying to draw barrels from the
west," said the oil major's trader in Tokyo, if the Brent-Dubai spread
will let them. October Minas barrels were being offered Wednesday at
25 cents against bids of 15 cents.
The Nile Blend cargoes are being loaded at Port Sudan on the Red Sea,
piped in 1,500 kilometers from the Greater Nile oil fields of Heglig and
Unity.
Malaysia's state oil company, Petroliam Nasional Bhd., or Petronas,
(P.PET), and China's state oil company, China National Petroleum Corp.,
own 30% and 40% stakes in the project respectively. Canada's Talisman
Energy Inc. (TLM) has 25% and the National Petroleum Co. of Sudan , or
Sudanpet, has 5%.
Production from the two fields is now at about 120,000 b/d, but Talisman,
the operator of the field, said this will quickly be raised to 150,000 b/d.
Sudan's domestic demand is about 30,000 b/d. |
