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Second crude cargo of year exported to China from Oregon: US Customs

The second crude cargo to be exported from Oregon to China this year set sail in March, according to US Customs and S&P Global Platts Analytics data. A third laden vessel left Oregon in April and is headed to China, according to cFlow, Platts trade flow software. Market sources said a 263,961-barrel cargo of heavy Access Western Blend Canadian crude was railed from Canada to Oregon and then loaded onto the medium-range-sized vessel, the Marlin Apatite, which docked in the Willamette River near Portland.

The vessel set sail on March 20 and arrived in China in early April at the Rizhao port of Shandong. The cargo was imported by a trading company Sinoenergy, to be used at independent refiner Jinshi Asphalt, according to market sources. A similar crude cargo totaling 243,879 barrels was exported from the same location in January, according to US Customs data.

Sinoenergy also imported that cargo of Canadian crude, which was loaded on to the MR-vessel, St. Jacobi. That shipment arrived at the Rizhao port of Shandong in early February.

Meet with bunker and residual fuel producers, traders, buyers, refiners, shipping companies, fuel logistics companies, and others in the industry. Last year we had over 150 delegates.
Learn more: View the complete agenda, see who’s speaking, and learn who attended last year. A third vessel, the Security, left Portland on April 26, according to cFlow.

The laden vessel was spotted in the North Pacific Ocean on Friday and is expected to arrive in Rizhao, China, on May 14. Sources said that each of the cargoes were loaded at a facility operated by Arc Logistics, which has an 18,000 b/d rail/marine terminal in Portland, Oregon. The terminal, which has storage capacity of 1.46 million barrels, has most recently been receiving and storing asphalt, aviation gasoline and distillates, but also has the ability to handle crude, according to a 2017 regulatory filing.

Arc Logistics was acquired by midstream terminal company Zenith Energy in December. Zenith has been on a buying spree lately, adding on new terminals around the world. The company also owns and operates terminals in Amsterdam, Ireland, Columbia and Germany.

A spokesman for Zenith Energy did not respond to a request for comment. The rare exports out of the US West Coast have caught the attention of media and analysts as crude movements out of Oregon are few and far between. It was unclear if this most recent occurrence was anything more than a one-off trial to test a potentially new market for Canadian crude.

However, exports of heavy, cheap Canadian crude out of the US West Coast could start occurring at a more regular pace if price differentials remain wide and demand in Asia continues to grow. There has been a small increase in crude oil export activity out of PADD 5 since the export ban was lifted in 2015. In 2016, the US West Coast, including Alaska, exported 3.736 million barrels of crude, according to the Energy Information Administration.

There was 4.533 million barrels exported from the region in 2017. Crude exports from the region were virtually non-existent between 2000 and 2015. In the 1980s and 1990s much of the exported oil from the West Coast was Alaska North Slope crude, which was exempt from the export ban.

However, exports dropped significantly as production of ANS began to decrease. Several crude traders said that they were not particularly surprised by the recent export since Canadian producers are counting on increased crude shipments by rail out of the country to alleviate inventories in Alberta. Price differentials for Western Canadian crudes have reached their lowest point in four years as the region deals with growing supply and pipeline bottlenecks.

Heavy Canadian crude benchmark Western Canadian Select was assessed Thursday at a £15.75/b discount to the NYMEX light crude calendar-month average.
Source: Platts[1]

References

  1. ^ Platts (www.hellenicshippingnews.com)



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