Page 9 - DMEA Week 25.pdf
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DMEA refInInG DMEA
Aramco, Petronas JV begins operations
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rePOrTs emerged last week that Malaysia’s Petroliam Nasional (Petronas) and saudi Ara- mco have put their 1.2-million tonne per year naphtha cracker into operation.
reuters quoted sources close to proceedings as saying that naphtha had been sourced from overseas this month for the new unit.
e naphtha facility forms part of the Us$2.7 billion refinery & Petrochemical Integrated Project (rAPID) being developed by a 50:50 joint venture between the two companies in Pengerang, Johor.
Mechanical completion of the 300,000 bpd re nery was achieved in November by UK-based ePC contractor Petrofac and trial runs at the crude distillation unit began in the rst week of January, processing saudi crude.
Aramco signed two share purchase agree- ments with Petronas in March 2018 a er several
years of negotiations.
These saw it acquire 50% stakes in both
rAPID and in certain petrochemicals deriv- atives plants being built nearby as part of the wider Us$16 billion Pengerang Integrated Com- plex (PIC) in the southern state of Johor.
On May 15, 2018, the shape of the tie-ups became clearer with the formal launch of the two project companies – called Pengerang re ning Co. (PrefChem re ning) and Pengerang Petro- chemical Co. (PrefChem Petrochemical), and to be known collectively as PrefChem.
Under the agreement, Aramco will supply 50% of the re nery’s crude feedstock with the option of increasing it to 70%.
repairs are still ongoing at the facility a er a re broke out during trial runs of the residue desulphurizer, however, middle distillate pro- duction is likely to begin in Q3 this year.
fUeLS
Chinese customers still buying Iranian LPG
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sOMe Chinese customers are still buying liq- ue ed petroleum gas (LPG) from Iran despite Us sanctions aimed at stopping such trade, according to ship-tracking data analysed by Par- is-based energy researcher Kpler sAs, Bloomb- erg reported on June 19.
“ ey’ve [tankers carrying the LPG] started using a variety of techniques to hide their activ- ity,” Ilya Niklyaev, an LPG analyst at Kpler, was cited as saying in an interview. “Like switching o transponders as well as intentionally signal- ling wrong destinations and indicating loading ports in Qatar, saudi Arabia or the UAe.”
Kpler sAs reportedly based its claims on estimates that at least ve supertankers loaded Iranian LPG in May and June that was destined for China. at would equate to around $100mn of the gas, according to Bloomberg calculations.
China sourced around a h of its LPG – used as cooking fuel, in cigarette lighters and in making plastic – from the Us before, as part of the growing trade war with Washington, Beijing slapped a 25% tari on the gas last August. Buy- ers then turned to Iran.
It accounted for around a third of Chinese imports of LPG in April, prior to President Don- ald Trump announcing that the Us would, from the start of May, aim to prevent all Iran’s energy
exports from making it on to world markets by imposing sanctions on sellers and buyers. e pressure on Iran to nd buyers for its LPG despite the threat of sanctions has made its LPG cargoes some of the cheapest in the world.
China took 346,000 tons, or 80%, of Iran’s LPG exports in May, Kpler estimated in a note. If the cargoes were loaded before the change of Us energy policy on Iran they may not have con- travened sanctions. Iran is likely to export a total of 400,000-500,000 tonnes in June with at least eight supertankers set to load the fuel in coming weeks, Kpler added. ree supertankers have loaded LPG from Iran in June, of which at least one is headed for China, it said.
Tankers carrying Iranian oil and gas are noto- rious for masking their journeys by turning o satellite locator beacons, a technique known as “going dark”. Fuel is transferred between ships to hide the origin of cargoes. Chinese re ners may also be circumventing American sanctions on importing Iranian oil. FGe said in a note last week that it expects some degree of non-compli- ance, Bloomberg reported. Beijing probably isn’t complying with Us sanctions on Iranian crude, Us Deputy energy secretary Dan Brouillette said last week, while adding that he didn’t have any hard evidence to show this.
Week 25 26•June•2019 w w w . N E W S B A S E . c o m P9
