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Total finds buyer for contaminated Urals crude

November 05/2019

MOSCOW (MRC) -- Seven months after loading a cargo of Urals crude that was contaminated with excess organic chlorides, reported S&P Global with reference to Total said Thursday a trading house bought the oil in a tender on Wednesday.

The price, a steep discount to the market, highlighted the ongoing costs of the contamination of the Russian crude earlier this year.

The sale came on the same day that Hungary settled with Russia over the contaminated oil that it had received through the Druzhba pipeline as part of the same episode, which damaged the reputation of the world's second largest crude exporter. None of the parties to the agreement - Lukoil, MOL and Transneft - gave financial details.

Totsa awarded its tender for a 100,000 mt cargo - equivalent to 720,000 barrels - of contaminated oil to an undisclosed energy trader on Wednesday at a discount of more than USD25/b to Dated Brent, Totsa - Total's trading arm - said Thursday.

The cargo was sold on an FOB basis and was expected to be lifted in November.

A representative from Totsa said the tender "was sold at a hefty loss (but) we have been able to sell everything".

Total has held similar tenders in recent months that failed to find any interest, and the conditions of Wednesday's tender showed flexibility on the part of the French major, with bidders able to request as little as 50,000 barrels and choose between oil that contained organic chlorides in a concentration of 27.3 ppm and 22.1 ppm.

Exports of Urals crude via the 1 million b/d Druzhba pipeline system were suspended mid-April after dangerous levels of corrosive organic chlorides were found in crude transported via the northern route into Belarus.

At the height of the episode, the levels of organic chlorides detected in the Urals stream at Ust-Luga rose to more than 60 ppm in several instances.

As MRC informed earlier, Total has decided to double the production capacity of its affiliate Synova to meet growing market demand for high-performance recycled materials. By early 2021, Normandy-based Synova, a French leader in its sector, will produce 40,000 tons per year of recycled polypropylene (PP) that meets the demanding quality standards of automotive OEMs and carmakers.

According to MRC's ScanPlast report, the PP consumption in the Russian market was 909,260 tonnes in January-August 2019, up by 10% 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:PP, crude and gaz condensate, petrochemistry, Total Petrochemicals, Russia, France.
Category:General News
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