Venezuela Orimulsion Export Halt Hits S Korea Power Plant
Friday December 13, 1:53 am ET
SINGAPORE - South Korea's Korea Southern Power Co. said Friday it will likely need to seek fuel oil on the spot market to counter a shortfall in orimulsion from Venezuela to meet the company's planned January startup of its Youngnam power plant.
Korea Southern Power, or Kospo, needs 70,000 metric tons of orimulsion to conduct trial runs at the upgraded Youngnam plant. However, a general strike in Venezuela has crippled the country's exports and Kospo is expecting to receive only 25,000 tons around Jan. 8-9, a company official said Friday.
The prospects of additional orimulsion cargoes shipped to South Korea appear remote with more than 40 tankers waiting off Venezuela to be loaded.
"We spoke to Venezuela (Bitor) a few days ago, and their response (to additional orimulsion exports) was 'no idea,"' the Kospo official said.
Bitor markets Venezuela's trademark orimulsion, a boiler fuel.
Kospo is "facing big trouble" as political uncertainties threaten regular Venezuelan exports to the Youngnam plant where a new desulfurizer was added, enabling Kospo to use orimulsion - a cheaper alternative to heavy fuel oil, he said. "Everything is up in the air now."
Kospo will buy 30,000 tons of fuel oil for January to complement the use of orimulsion in trial runs of the 400-megawatt plant.
A disruption in Venezuela's orimulsion supply to the South Korean power generating company couldn't have come at a worse time. Japan's Tokyo Electric Power Co. (J.TER or 9501) has plans to shut its nuclear reactors and higher utilization of oil and gas-fired power turbines coincide with a winter demand surge for liquefied natural gas for heating in North Asia.
Tepco's nuclear woes have already raised demand for fuel oil in the North Asian power generating sector, and unforeseen demand from Kospo will squeeze fuel oil availability even more.
If Venezuela's exports fail to normalize in the next month, Kospo will need to buy 40,000 tons of fuel oil for use in February. Before plans were put in place for Youngnam to burn orimulsion, the plant burned an average of 400,000 tons of fuel oil annually.
Kospo is a unit of Korea Electric Power Co. .
Venezuelan government and opposition representatives adjourned negotiations Thursday without resolving their differences, Organization of American States President Cesar Gaviria said.
"I must reiterate that we're not close to a solution," Gaviria said at a televised press conference, on the 11th day of a nationwide strike that has paralyzed Venezuela's vital oil industry and many other sectors. |
