Page 9 - AsianOil Week 40
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EAST ASIA AsianOil
The two countries reached an agreement on the project during Indian Prime Minister Narendra Modi’s visit to the East Asian country in 2015.
EIL said in May that it had signed an agreement with Mongol Refinery State Owned to provide project management services. EIL carried out a detailed feasibility study for the refinery before being pre-qualified and shortlisted for the project.
Mongolia broke ground on the refinery, which is expected to boost the country’s gross
domestic product (GDP) by 10%, in June 2018. The project will allow the country to slash its dependency on Russian fuel, with imports amounting to around 1.5mn tons in 2017 – or 97% of demand.
Mongolia exported 6.1mn barrels of crude oil to China in 2018, while total production amounted to 6.4mn barrels, local media reported earlier this year citing Ministry of Mining and Heavy Industry data.
CNPC venture in Venezuela suspends blending operations
PROJECTS & COMPANIES
SINOVENSA, a joint venture between Vene- zuela’s state-owned PdVSA and China National Petroleum Corp. (CNPC), has reportedly sus- pended work at its crude blending plants in the Orinoco region.
Sources with knowledge of the matter told Reuters on condition of anonymity last week that the venture, also known as Petrosinovensa, had halted blending operations because its invento- ries were completely stocked. Sinovensa took this step because its stocks were full as a result of the US government’s sanctions on PdVSA and Venezuela’s government, they said.
“Petrosinovensa’s blending facilities have been halted as inventories reached their maxi- mum level,” one of the sources explained. “They have been unable to market the oil.”
Until recently, the joint venture was combin- ing ultra-heavy crude from Orinoco fields with lighter grades to produce Merey, a heavy blend with a specific gravity of about 16 degrees API that some Asian refinery operators use as feed- stock. But it lost its last remaining customer in August, when CNPC stopped importing Merey because of concerns about penalties under the US sanctions regime.
Initially, Sinovensa responded to CNPC’s move by cutting back on production. Reuters said it had viewed internal documents from PdVSA stating that the joint venture had turned out just 72,000 barrels per day of Merey blend in September, down from the planned level of 110,000 bpd.
Later, the joint venture also suspended work on an expansion project at the Jose plant, one of its blending facilities. Never- theless, these measures did not keep inven- tory levels in check. As a result, Sinovensa followed the example set earlier this year by Petropiar, another joint venture that had been turning out Merey blend. Petro- piar, owned by PdVSA and the US company Chevron, halted blending operations in mid-September, owing to maxed-out inven- tories and a lack of export options.
PdVSA appears to be facing similar prob- lems. According to estimates from the data intelligence consultancy Kpler, the Venezue- lan NOC’s stocks contained about 38.8mn barrels of crude oil as of the end of September, up by about 8.4% on the previous month’s fig- ure of 35.8mn barrels.
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