MOSCOW (MRC) -- Several European and Nordic oil refiners are taking less crude from Saudi Arabia in April, industry sources said, suggesting a lack of demand for the extra supplies the country has offered as it seeks to boost market share, said Hydrocarbonprocessing.
The world’s top oil exporter is planning to boost exports sharply after a three-year supply-cut deal between the Organization of the Petroleum Exporting Countries and other producers led by Russia collapsed earlier this month.
But with demand also collapsing due to government restrictions to contain the coronavirus outbreak, oil companies have been reducing refinery processing rates and are not in a rush to nominate extra Saudi barrels, the sources said.
“There are definitely refinery run cuts,” a trade source, speaking on condition of anonymity, who has discussed the issue with oil companies said. “So then it is hard to nominate a lot."
Shell is among the major oil companies taking less Saudi crude, two industry sources said. One source said companies were seeking to cut their April allocations of Saudi crude by as much as 25%. Shell declined to comment.
Saudi state oil company Aramco also declined to comment.
As MRC informed before, a contractor working at Shell's Pulau Bukom manufacturing site in Singapore has contracted the new coronavirus. The Bukom manufacturing site in Singapore houses Shell's biggest wholly-owned refinery. The company said earlier it had sent some staff home from its main office at Metropolis in western Singapore after discovering another employee had been in contact with a carrier.
We also remind that Shell Singapore restarted its naphtha cracker in Bukom Island in early December, 2019, following a two months maintenance shutdown since the beginning of October 2019. Thus, this cracker was taken off-stream for the turnaround on 1 October 2019. The cracker is able to produce 960,000 tons/year of ethylene and 550,000 tons/year of propylene.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.
MRC