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Tropical Storm Cristobal closes ports in Mexican Bay of Campeche

June 05/2020

MOSCOW (MRC) -- Tropical Storm Cristobal forced ports to close in three states in Mexico's Bay of Campeche area June 3, although there has been no major impact on oil, gas or power generation infrastructure, reported S&P Global.

Ports in the states of Veracruz, Tabasco and Campeche have been closed to all ships, said the head of Mexico's civil protection agency, David Leon, in a press conference.

Northern ports in the state of Veracruz remained open, including the ports of Veracruz and Tuxpan, according to a Mexico-based oil broker.

All relevant oil and gas infrastructure is working without disruption due to emergency protocols put in place by Pemex, the state oil company, said Leon. Power generation plants of state utility CFE in the area were also operating normally, he said.

The 220,000 b/d Minatitlan refinery, located in Veracruz, is operating normally, although still below capacity, a source at the plant said.

It was not clear what impact the storm has had on petroleum terminals in the area. Major Mexican oil facilities such as the Dos Bocas marine terminal will likely face loading delays. Other facilities in the storm's path include the Villahermosa terminal, Campeche terminal and Progreso terminal, and Pajaritos terminal.

The Pajaritos terminal and the Tuxpan terminal are the two main loading destinations for US refined products exports into Mexico, according to Kpler vessel tracking software.

However, exports to Mexico have slowed since March as the coronavirus has reduced fuels consumption in Mexico.

Kpler showed very few clean or dirty tankers in the area June 3.

Campeche is also one of the most active oil and gas exploration and production regions in the country.

Pemex was not immediately available for comment.

Cristobal, which was formed with the remnants from storm Amanda, showed maximum sustained winds of 60 mph June 3, according to the US National Hurricane Center, which issued a tropical storm warning for area ports.

The storm is currently on track to head north into the US Gulf of Mexico, home to roughly 1.9 million b/d of crude production, according to the US Energy Information Administration. The storm is expected to weaken before it makes landfall in Louisiana by late June 6.

Offshore oil and gas producers said they are monitoring the storm, and BP has already started to reduce output in preparation.

"With forecasts indicating that Cristobal will begin moving north across the Gulf of Mexico later this week, BP has begun removing offshore personnel and ramping down production at BP's operated facilities Thunder Horse, Atlantis and Na Kika," said BP spokesperson Jason Ryan. "Non-essential personnel are being evacuated from BP's operated Mad Dog platform but production remains unaffected at this time."

Other producers were beginning to reduce personnel as well.

"To ensure the safety of our people and protection of the environment, we are removing non-essential personnel from some of our central GOM facilities," Occidental Petroleum said in a prepared statement. "All of our facilities in the Gulf remain operational at this time."

Likewise, Royal Dutch Shell said it has activated its hurricane team and is closely monitoring the storm.

"We will be reducing personnel on board some assets as work activities and conditions allow," said Shell spokeswoman Cynthia Babski. "There are no planned impacts to production at this time."

Gas liquefaction terminals in Louisiana and Texas are also monitoring Cristobal to determine if they need to implement contingency plans.

At Cheniere Energy's Sabine Pass in Cameron Parish, Louisiana, the operator has emergency preparedness and response plans that it will activate if necessary, spokeswoman Jenna Palfrey said.

In Hackberry, Louisiana, south of Lake Charles, current operations of Trains 1 and 2 as well as commissioning activities underway for Train 3 have not been interrupted at Sempra Energy's Cameron LNG, spokeswoman Anya McInnis said. Maintenance on Train 3 unrelated to the storm continued.

Operators have already been pulling forward maintenance, shutting down units and working to control costs as they seek to manage lower production and trade flow due to the coronavirus pandemic.

Feedgas flows to US Gulf Coast LNG export terminals rose approximately 600 MMcf/d to 3.8 Bcf/d on June 3 versus the day before, but flows are still down substantially from a week earlier amid weak global demand.

With the volume of cargo cancellations reported for July approximately double the count for June, and questions about the extent of a possible recovery in August, the US market is expected to face pressure for the foreseeable future. Decisions on whether to sanction new projects are likely to see further delays.

As MRC reported earlier, Royal Dutch Shell Plc restarted the crude distillation unit, coker and gasoline-producing cat cracker at its 225,300 barrel-per-day (bpd) Norco, Louisiana, refinery. Shell is restarting the hydrocracker, while the reformer and naphtha hydrotreater will remain shut for previously planned work, the sources said. The coker is scheduled to undergo planned work beginning next week, but is expected to remain in operation.

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 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim.  At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.
Author:Margaret Volkova
Tags:PP, PE, LLDPE, crude and gaz condensate, PP random copolymer, propylene, LDPE, ethylene, petrochemistry, BP Plc, Pemex Petrochemicals, Shell, Mexico, Rossiya, Singapore, USA.
Category:General News
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