Japan steps up US LPG purchases in fallout from Sino

MOSCOW (MRC) -- Japanese utilities and industrial companies are snapping up US cargoes of liquefied petroleum gas (LPG) that are seeking a new home after Chinese buyers started to shun them amid an escalating trade war between Washington and Beijing, reported Reuters.

Taking in fuel that would otherwise be heading for China means Japanese imports of US LPG are set to stay strong after already hitting record levels earlier this year.

Robust Japanese purchases of LPG, often used as fuel for transport or cooking, underscore how the impact from the festering trade dispute between Washington and China is rippling across supply chains around the world.

The uptick could also help Tokyo rebuff pressure from US President Donald Trump to cut a multi-billion dollar trade surplus or face rising tariffs.

"US LPG is facing difficulties reaching China," said Seiya Araki, president of Astomos Energy, a major Japanese buyer of the fuel.

"That has helped push large flows of US LPG to Japan and South Korea, and there's a high chance that the share of U.S.-produced LPG would rise further."

Japanese government data released on Thursday shows the country's imports of LPG from the United States jumped about 13 percent in July from the same month last year to around 460,000 tonnes, while ship tracking data indicates that just a single U.S. LPG cargo has left for China since the start of July.

Washington and Beijing have been locked in a tit-for-tat trade battle, with both sides slapping steep tariffs on each other's goods in a fight that has sparked dire warnings of economic doom and gloom.

China announced earlier this month that it would impose 25 percent additional tariffs on imports of 333 US goods worth USD16 billion from Aug. 23, including LPG.

In the United States, LPG is a by-product of natural gas production and US exports have surged on the back of the shale gas boom of the past decade. US LPG exports now compete with supplies from the Middle East.

In Japan, the world's No.3 importer of LPG, U.S. supplies hit an all-time high of 6.09 million tonnes in 2017. They marked a monthly record of 738,016 tonnes in April this year.

US supplies of the fuel, which includes propane and butane, amounted to about 70 percent of total imports in May, according to the Japan LP Gas Association.

The US has become increasingly price competitive. Taking freight and insurance into account, Japanese government data shows US LPG prices are mostly cheaper than Middle Eastern benchmark Saudi Arabian supplies.

Trump has already imposed tariffs on Japanese steel and aluminium and is threatening to place duties on crucial auto exports from Japan if trade isn't more balanced.

Talks on "free, fair and reciprocal" trade between the US and Japan ended last Friday without any agreement, with the two sides set to meet again in September.
MRC

PVC prices in Russia will again rise in the second half of August

MOSCOW (Market Report) - Some Russian producers announced a further price rise of suspended PVC (SPVC) for supply to the domestic market this week. The price increase was announced by roubles (Rb) 1,000-1,500/tonne, according to ICIS-MRC Price Report.

Russian consumers had to accept an increase in PVC prices by Rb3,000/tonne in the early August in comparison with the level of July, although initially the producers tried to achieve a price increase of Rb4,000/tonne. A number of producers have announced an increase in prices for additional volumes for August delivery of SPVC by Rb1,500/tonne since 15 August.

The price rise of Russian SPVC was a result of several factors. On the one hand, SPVC prices continue to increase in the last few weeks in the external markets, particularly in China.

Export prices for acetylene PVC in China increased by USD30/tonne by mid-August in comparison with the July level.
On the other hand, the August devaluation of the rouble against the dollar significantly affected prices of Russian PVC.

Some Russian producers announced an increase in PVC prices in September, so that the total increase in prices amounted to at least Rb2,000/tonne in relation to the beginning of August.

Despite the announced increase in prices, local processors are not in a hurry to form additional stocks, partly because of limited working capital, partly because of the desire to keep prices at the current level.
MRC

Venture Global LNG announces additional private placement funding of USD160M

MOSCOW (MRC) -- Venture Global LNG, Inc. has announced that it has raised additional private capital of approximately USD160 million from large institutional investors, as per Hydrocarbonprocessing.

The company has now raised a total of USD630 million to support the development of its projects.

The transaction proceeds will fund Venture Global LNG’s continued development activities for its proposed LNG export facilities in Louisiana. The company is developing both the 10 MTPA Calcasieu Pass facility on the Gulf of Mexico and the 20 MTPA Plaquemines LNG facility on the Mississippi River using a highly efficient, mid-scale liquefaction technology provided by its strategic partner GE Oil & Gas, LLC, part of Baker Hughes, a GE company (BHGE).

In response to the capital raise, Co-CEO Mike Sabel stated, "Both new and existing investors recognize our quality execution as we continue signing binding 20-year agreements for the purchase of LNG from our Calcasieu Pass and Plaquemines projects. Our growing list of world-class partners, which includes Shell, BP, Edison S.p.A., Galp, and PGNiG, among others, can feel confident in our ability to deliver the lowest cost LNG from North America."

Co-CEO Bob Pender added, "Following receipt of the Draft Environmental Impact Statement for our Calcasieu Pass project in June, we are preparing for our FERC authorization and the commencement of construction in early 2019. The contracting momentum for our Plaquemines project continues to grow, and we expect to announce additional milestones in the near term."
MRC

U.S. crude stockpiles soar unexpectedly despite record refinery runs

MOSCOW (MRC) -- U.S. crude oil stockpiles jumped unexpectedly last week despite record high refinery runs, while gasoline stocks decreased and distillate inventories grew, the Energy Information Administration said, as per Reuters.

"We've gotten hit by a wall of crude," said Phil Flynn, an analyst at Price Futures Group in Chicago. "This is really unheard of to have refiners running at 98 percent at this time of year and have it not impacting the crude stockpiles."

Crude inventories rose 6.8 million barrels in the week to Aug. 10, compared with analysts' expectations for a decrease of 2.5 million barrels.

Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures rose 1.64 million barrels, EIA said.

Net U.S. crude imports rose last week by 1.34 million barrels per day. Refinery crude runs rose by 383 Mbpd to 17.98 MMbpd, the highest on record, EIA data showed. Refinery utilization rates rose by 1.5 percentage points to 98.1 percent, the highest since 1999.

The build in crude stockpiles added to downward pressure on crude futures, which had dropped USD1 a barrel prior to the report. U.S. crude futures extended losses to more than USD2 after the data and was last trading at USD64.85.

Gasoline stocks fell by 740,000 barrels, compared with analysts' expectations in a Reuters poll for a 583,000-barrel drop.

Distillate stockpiles, which include diesel and heating oil, rose by 3.6 million barrels, versus expectations for a 1 million-barrel increase, the EIA data showed.
MRC

Citgo to resume Aruba refinerys refurbishing work next month

MOSCOW (MRC) - A unit of Citgo Petroleum in September plans to resume long-delayed work to refurbish an idled, 235,000-barrel-per-day (bpd) oil refinery on Aruba, the Caribbean island’s government said, as per Hydrocarbonprocessing.

Due to a lack of credit, Citgo Aruba Refining in February had slowed efforts at the plant amid U.S. financial sanctions imposed since 2017 on its parent company, Petroleos de Venezuela (PDVSA).

Under a USD685-million project that was approved in 2016 by Aruba’s government in a 25-year lease contract, Citgo aims to revamp and restart a facility that has been idled since 2012 when the previous operator, U.S.-based Valero Energy, halted crude processing due to low profits.

Citgo declined to comment.

PDVSA and its subsidiaries are increasingly under pressure to gain access to a Caribbean terminal or a refinery since U.S. producer ConocoPhillips in May began seizing the company’s overseas assets to satisfy a $2 billion arbitration award.

The project’s latest phase will require about USD35 million in investment and will take eight to 10 months to be completed, Aruba’s Labor Ministry said in a statement. Some 150 additional workers will be hired for the task.

"The total number of workers, mostly local, is now reaching 500 people ... Financing for this stage is already available," Aruba’s Labor Minister Glenbert Croes said.

The plan was submitted by Citgo to the government of Aruba earlier this week, according to three sources with knowledge of the talks.

Citgo appointed new executives for its Aruba unit in June in preparation for the new stage of the refurbish plan.
MRC