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the somewhat improbable 12mn bpd, total liq- uids capacity would be somewhere in the region of 13mn bpd. Sources told AsianOil’s sister pub- lication Middle East Oil & Gas (MEOG) that this is not the case.
Having said that, perhaps Saudi does not need that much capacity for markets to remain sated. Despite the 5.7mn bpd drop-off last week, Brent crude futures rose by around $8 only briefly before trending downward as the panic subsided.
Asian alarm
Aramco’s problem now appears to be with the grade of crude it can produce rather than the quantity.
On September 22, the Nikkei Asian Review quoted sources at Japan’s JXTG Nippon Oil & Energy as saying the company had been notified by Aramco of potential changes to shipments. The sources added that Aramco had not pro- vided a reason, but said that it sought to change the cargoes it sends to JXTG Nippon from Arab Light to Arab Heavy and Medium grades.
Speculating on the rationale, the sources told Nikkei that it was likely that repair work on a damaged desulphurisation unit is taking longer than anticipated. One JXTG executive was quoted as saying: “It is difficult to believe that Aramco’s production will be fully restored by the end of the month.”
The report noted that while Idemitsu Kosan and Cosmo Energy had not been informed of any changes, all three had been told to anticipate delays for October shipments of several days.
Reuters quoted a Chinese official as saying last week that Aramco had informed PetroChina that some light crude loadings for October
would be delayed by around 10 days as a result of the outage, while some light September ship- ments would be replaced with heavy crude.
Meanwhile, Reuters quoted sources on Sep- tember 23 as saying that Sinopec’s trading arm Unipec would lift Arab Heavy crude instead of Arab Light and Arab Extra Light this month.
The sources added that India Oil Corp. (IOC) would be loading Arab Heavy instead of mostly Arab Extra Light on the VLCC Kal- amos vessel, while two South Korean refiners have agreed to substitute medium and heavy grades in for Arab Light and Extra Light for September and October.
Despite Aramco’s assurances, the delays appear to be continuing, with one Japanese refin- ing source telling Reuters that VLCC Tango was still awaiting its Banoco Arab Medium crude load. He said Aramco had given notice of a delay “but every day it’s revised. I’m afraid the situation is more serious than we assumed but still infor- mation is limited.”
All of this suggests that bringing Abqaiq back into full operation is likely to take some time. The facility is critical for processing the Arab Light and Arab Extra Light processed at the Ghawar, Khurais and Shaybah fields. For at least the last year, Ghawar has been running at around 3.7mn bpd, down from previous industry estimates of more than 5mn bpd, while Khurais has an Arab Light capacity of 1.2mn bpd from a total output of 1.45mn bpd, and Shaybah produces 1mn bpd of Arab Extra Light.
All eyes will continue to focus on repairs at Abqaiq, and with customised equipment thought to be required to resume full operations, these will take some time.™
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w w w . N E W S B A S E . c o m Week 38 25•September•2019