Russia remains top oil supplier to China for eighth month

MOSCOW (MRC) -- Russia held its position as China's top crude oil supplier for the eighth month in a row in October, reported Reuters with reference to customs data.

Shipments from Russia in October hit 4.649 MMt, or around 1.095 MMbpd, according to the detailed breakdown of commodity trade data released by China's General Administration of Customs. That was 1.9% lower than a year earlier and off the record in September at 1.545 MMbpd.

Saudi Arabia came a close second, with supplies in October up 16 percent from a year ago at 1.086 MMbpd.

For the first 10 months, crude volumes from Russia rose 15.9 percent year-on-year to about 49.65 MMt, or 1.19 MMbpd.

That comes as CEFC China Energy is set to start lifting ESPO and Sokol cargoes in January from Russian oil giant Rosneft, in an annual deal that will see the private Chinese firm overtake Trafigura as the top trader of Russian oil in Asia.

Third-ranking Angola supplied 45.3% more crude oil last month versus a year earlier at 839,840 bpd.

The West African exporter stood as the second-largest supplier, ahead of Saudi Arabia, for the January-October period with total supplies up nearly 18% on-year.

Saudi volumes rose less than 1% on-year during the same period at about 1.036 MMbpd.

Shipments from Iran were down 11.5% last month from a year earlier at about 685,150 bpd, while volumes for the first 10 months gained 2.2% year-on-year.

Iran is pushing to retain customers for its oil in Asia, hoping that price reductions will boost the appeal of its crude compared with other Middle Eastern supply even as the potential threat of further U.S. sanctions on the country looms.

October U.S. shipments to China came in 878,623 tonnes, or 206,900 bpd, the second strongest monthly rate since China started importing U.S. crude late last year. Supplies in the January-October period totaled 5.6 MMt, or 135,300 bpd.

China's total crude oil imports slid in October to their lowest monthly level in 13 months, tumbling from a near-record in September.
MRC

MOSCOW (MRC) — A US regulator's preliminary investigation into the biggest oil pipeline spill this year has raised a red flag that could trigger an extensive and costly inspection of tens of thousands of miles of underground energy lines, said Hydrocarbonprocessing.

The 5,000-bbl leak on TransCanada Corp's Keystone pipeline on Nov. 16 in South Dakota might have stemmed from damage caused by a weight put in place when it was built in 2008, the Pipeline and Hazardous Materials Safety Administration said in a report published on Tuesday. Weights are used to prevent pipelines from moving and reduce the risk of damage or ruptures when water tables rise.

The regulator's finding has implications for the 2,687-mi pipeline and others throughout the world. The weights, which tip the scales at 7,000 lbs (3,175 kg) or more, are commonly used, but only the pipeline operators know where they are located.

Damage from weights "could happen on other segments of this pipeline and other pipelines," said Najmedin Meshkati, professor of civil and environmental engineering at the University of Southern California. The Keystone pipeline carries 590,000 bpd from Alberta's oil sands to US refineries. TransCanada's proposed Keystone XL line would add another 830,000 bpd of capacity.

Nebraska officials approved the construction of that line even after the leak, although it is still unclear if TransCanada will build it. Depending on the results of the full investigation, construction plans for new lines such as the Keystone XL may need modification. Existing lines may also have to be checked, a difficult and potentially expensive undertaking.

US regulators do not have specific information on the types of weights or their locations because pipeline companies are not required to submit data, said Carl Weimer, executive director of the non-profit Pipeline Safety Trust. PHMSA did not respond to requests for comment on this question.

The Canadian Energy Pipeline Association also said operators, not regulators, keep tabs on this information. "We would not have an inventory; that would need to come from the individual companies,” said Carla Beynon, a spokeswoman for the industry group.

On Tuesday, PHMSA ordered TransCanada to clean up the site and analyze data on the location of other weights on the Keystone line where the land may have similar characteristics as where the leak occurred. TransCanada would not say how many weights were placed along the pipeline, which runs through several states and Canadian provinces, during construction.

In one of those states, the North Dakota Public Service Commission, which regulates pipelines, has asked for briefings with TransCanada on its monitoring procedures. Commissioners are also waiting to see the full PHMSA report and results of testing on the damaged section of pipeline.

"If there are issues on how this pipeline was designed and constructed, we will certainly be concerned," said commission Chairman Randy Christmann.
MRC

MOSCOW (MRC) — Shell Midstream Partners, L.P. entered into a purchase and sale agreement to acquire from wholly owned subsidiaries of Shell a 100% interest in five products terminals and partial interest in two Gulf of Mexico corridor pipelines and in two strategic onshore pipelines for USD825 MM, said Hydrocarbonprocessing.

The acquisition price reflects an approximate 7.9 times multiple of the assets' forecasted 2018 adjusted earnings before interest, taxes, depreciation and amortization and is expected to be immediately accretive to unitholders. Shell Midstream Partners intends to fund the acquisition with borrowings under new and existing credit facilities. The acquisition is expected to close on or around Dec. 1, 2017, subject to customary closing conditions.

Highlights of the assets to be acquired: A 100% interest in Triton West LLC which owns the Anacortes, Colex, Des Plaines, Portland, and Seattle products terminals. The terminals are strategically located with take-or-pay contracts with wholly owned subsidiaries of Shell. Each contract has an initial term of 10 yr with options to extend up to 20 yr. The acquisition of the products terminals builds upon Shell Midstream Partners' strategy to access assets across Shell's broad asset base.

A 22.9% interest in Mars Oil Pipeline Company LLC (Mars) and a 22% interest in Odyssey Pipeline LLC (Odyssey). Both Mars and Odyssey serve high growth areas of the Gulf of Mexico. Following the closing of the transaction, Shell Midstream Partners will own 71.5% of Mars and 71% of Odyssey.

A 10% interest in Explorer Pipeline Company (Explorer) and a 41.48% interest in LOCAP LLC (LOCAP). Explorer owns an 1,830-mi products pipeline extending from Gulf Coast refineries to the upper Midwest. LOCAP owns a 55-mi common carrier crude pipeline from the LOOP Clovelly Salt Dome facility to the active trading hub of St. James, Louisiana.

The terms of the acquisition were approved by the conflicts committee of the Board of Directors of the General Partner of Shell Midstream Partners, which is comprised entirely of independent directors. This committee was advised by Tudor, Pickering, Holt & Co. as to financial matters and Akin Gump Strauss Hauer & Feld LLP as to legal matters.
MRC

MOSCOW (MRC) -- SK Advanced is likely to brought on-stream its propane dehydrogenation (PDH) plant following a maintenance turnaround, as per Apic-online.

A Polymerupdate source in South Korea informed that the company has planned to complete maintenance at the plant by mid-December, 2017. The plant was taken off-line for turnaround on November 20, 2017.

SK Advanced, a joint venture of South Korea?s largest LPG supplier SK Gas and Advanced Petrochemical Company (APC) of Saudi Arabia.

Located in Ulsan, South Korea, the plant has a propylene production capacity of 600,000 mt/year.

As MRC informed before, in May 2016, SK Advanced Co. began trial production of propylene at its completed PDH plant in Ulsan, South Korea. Commercial operations started in the second quarter of 2016.

SK Advanced, a joint venture of South Korea's largest LPG supplier SK Gas and Advanced Petrochemical Company (APC) of Saudi Arabia.
MRC

MOSCOW (MRC) — Chinese state companies are shipping diesel to new buyers in the Middle East and Latin America as exports of the fuel head towards a record, and independent refiners could help raise the outbound sales even higher next year, multiple sources said, as per Hydrocarbonprocessing.

At least one of the independent refiners is looking to invest in fuel storage in southern Malaysia and others are setting up offices in Singapore, anticipating that Beijing is going to ease its export policy for the independent companies, said the sources involved in the shipment of diesel from China.

The world's second-largest oil consumer exported 13.2 MMt of diesel over January to October, up nearly 9% from a year ago, according to customs data. Monthly exports hit a record high in March, and exports for 2017 are on course for the most ever for a year. If Beijing lifts its ban on China's independent refiners exporting refined fuel, diesel exports could hit another record next year, the sources said.

"(China's Ministry of Commerce) may award more product export quotas for 2018 and include independents, (though) volumes are unlikely to be massively higher than the 44 MMt issued this year," said Nevyn Nah, a Singapore-based analyst at Energy Aspects.

China's diesel surplus comes amid an expansion of its refinery capacity and a slowdown in domestic demand. Chinese refineries have also upgraded to meet new fuel standards, and that means the nation's exports can increasingly be sold into Europe and Australia, traders said. For instance, Unipec, the trading arm of Asia's largest oil refiner Sinopec, started diesel exports to Europe this year and is shipping what is likely the first Chinese-origin cargo to New York harbor.

Unipec has also started shipping diesel to Latin America, exporting a few medium-range sized cargoes in the second half of the year, said a source familiar with the matter. China's state-owned Zhenhua, a unit of defense conglomerate China North Industries Group Corp (NORINCO), has for the first time won a tender to supply about 25% of the nearly 2.4 MMt of diesel required by Iraq in 2018.

"The Chinese are likely to increase their market share in both North and South America as they take advantage of arbitrage opportunities," Energy Aspects' Nah said. Several teapots have set up offices in Singapore and are growing their presence in the oil-trading hub.

At least one of them is looking to invest in oil product storage in southern Malaysia, a source close to the matter said, adding that details are still being worked out. "We expect the Chinese government to allow exports next year or by 2019, so we want to be ready when that happens," the source said.
MRC