Euro refiners study Sudan's new Nile Blend oil
LONDON, Reuters World News Service, May 26
New crude grade Nile Blend of Sudan could
ultimately cut into the market share of
Libya's Amna grade in the Mediterranean
if the price is right, oil refiners
analysing the grade said on Tuesday.
Around 120,000 barrels per day (bpd) of
Sudan's new Nile Blend crude are expected to
compete in world markets by the end of June,
Sudan having nearly completed a 1,500-km
pipeline from its southern oilfields to the Red
Sea.
Refiners and traders in the Mediterannean
and Europe have received assays of the new
grade in the run-up to its debut.
Among the crude grade's positive attributes
are a relatively low metals content and low
sulphur content compared to Amna, traders
familiar with Nile Blend's specifications said.
"In the end it could be quite a good
competitor for Amna in the Mediterranean
depending on one's refining system, and
depending on the discount offered," said a
trader with a refiner.
According to an initial sample of Nile Blend
drawn from 12 wells in the Sudan on March 7,
the new grade has a nickel content of five
parts per million and a vanadium content of
less than one part per million.
This compares with Amna specifications of
roughly 8.5 parts per million for nickel and 1.1
parts per million for vanadium.
"The lower metals content of the new Blend
could be very enticing for some refiners," the
refining source said.
An assay of the new Sudan crude shows
sulphur content of 0.04 percent sulphur by
weight, compared to a 0.15 percent sulphur
level for Amna.
Nile Blend's relatively high pour point of 36
degrees celsius, however, could add to
shipping costs, as volumes will most likely
have to be heated in transit, the trader said.
A Sudan Energy and Mining Ministry official
said initial sales of the grade will be spot or
short-term contracts until the best buyers
and markets have been identified, and
customers have had a chance to test the
new crude in their refineries.
Customers in the United States are out of
bounds owing to a U.S. embargo on Sudan.
Canada's Talisman Energy Inc <TLM.TO> has
a 25 percent stake in the new project. Its
partners include China National Petroleum
Corp, Malaysia's state oil company Petronas
and Sudan's Sudapet.
Sudanese crude costs a competitive $3 to $4
to produce, including investment and
operating costs, a ministry official said.
Freight rates for the blend for Mediterranean
customers will be higher than for Libyan
grades due to shipment from the Red Sea
through the Suez canal.
Nile Blend's API gravity has been estimated
by traders in a range near 33 degrees.
Peter Lardner, London energy desk |
