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Total tenders to sell 1.3M barrels of tainted oil

September 18/2019

MOSCOW (MRC) -- Frances Total has issued a tender to sell 1.3 million barrels of contaminated Russian Urals crude oil for loading from Rotterdam port, reported Hydrocarbonprocessing with reference to three trading sources.

Russia loaded some 11 million barrels of Urals crude oil with organic chloride content that exceeded allowed levels from Ust-Luga port during an oil contamination crisis earlier this year.

Organic chloride is a chemical compound used to boost oil extraction by cleaning wells and accelerating the flow of crude. It must be removed before oil is sent to costumers because it can destroy refining equipment.

Contaminated Urals is very difficult to sell as the only way to make it acceptable for a refinery is to mix it with clean oil in a proportion of one to ten, or even more depending on the organic chloride content in the crude, traders have said.

Frances Total, as a big buyer of Urals oil, suffered a major impact on its business as it received contaminated Russian crude both via the Druzhba pipeline to its Leuna refinery in Germany and via seaborne cargoes loading from Ust-Luga.

Total Chief Executive Patrick Pouyanne said in May his company would seek compensation for the losses caused by the contaminated oil.

Trading sources told Reuters that Total was looking to sell 1.3 million barrels of contaminated oil in three parcels, with organic chloride content ranging from 23 parts per million (ppm) to 143 ppm.

Bids will be accepted until Sept. 19, with the results announced on Sept. 25, the sources said.

Total declined to comment.

In early August, BP tried to sell around 1 million barrels of contaminated oil from a tanker, but failed to find a buyer, trading sources said.

I honestly think that Total has as good a chance to sell its contaminated Urals as BP - no chance, said one of the trading sources.

Several Urals buyers including trading companies like Vitol, Glencore and Trafigura are stuck with contaminated Urals, which is difficult to sell in the market.

As MRC informed earlier, Totals Gonfreville refinery near Le Havre, France, started its scheduled maintenance September 4, 2019. The works will last around two months. The large-scale maintenance, which takes place once every seven years, follows the maintenance at the petrochemical site which took place last year. Preparations for the turnaround have been going on for the last three years.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,255,800 tonnes in the first seven months of 2019, up by 9% year on year. Shipments of all PE grades increased. Meanwhile, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
Author:Margaret Volkova
Tags:Europe, PP, PE, crude and gaz condensate, PP block copolymer, homopolymer PP, propylene, ethylene, petrochemistry, Total Petrochemicals, Russia, France.
Category:General News
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