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Refinery in Turkey at full capacity in May, adding to Urals shortage

April 22/2019

MOSCOW (MRC) -- Azerbaijanís state-owned SOCAR plans to reach full oil refining capacity of 200,000 barrels per day at its Turkish STAR plant in May, three industry sources said, adding to shortages of Russian Urals crude in southern Europe, said Hydrocarbonprocessing.

STAR, SOCARís $6 billion Turkish oil refinery launched last year, can process Russiaís flagship Urals blend, Iraqi Kirkuk and similar grades but has only bought Russian crude so far, according to industry sources and Refinitiv Eikon data.

"STAR is working in a test mode so far, in April we will supply it with the same amount of oil as in March,Ē a source in SOCAR Turkey told Reuters. ďYet in May, the plant will start processing oil at its full capacity."

According to data from Refinitiv Eikon and trading sources, STAR processed around 700,000 tonnes of oil, or 166,000 barrels per day, in March. A second source, familiar with the plantís plans, confirmed STAR is due to process 200,000 bpd next month.

The SOCAR Turkey source said STAR planned to continue processing solely Urals in the coming months, as in the past. This means that STAR alone will consume almost a half of the Urals grade offered in the Mediterranean, Reuters calculations showed.

Urals differentials in the Mediterranean have traded at a premium to dated Brent in January-February and reached the highest premium since 2013 earlier this year due to limited exports of the grade and a shortage of sour grades due to a lack of Iranian crude because of sanctions.

And as the sanctions waivers by the United States on Venezuelan oil sales expire later in April, demand for Urals, coupled with the need for more volumes at STAR, is going to tighten Russiaís oil supply in southern Europe, traders say.

The SOCAR Turkey source said thus far, the company regards Urals price as acceptable but if it rises any further, it may consider buying other oil grades. SOCAR did not reply to a Reuters request for a comment.
Author:Anna Larionova
Tags:petroleum products, petrochemistry, Crude oil, SOCAR Polymer.
Category:General News
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