Page 15 - DMEA Week 12 2021

DMEA NEWS IN BRIEF DMEA

PIPELINES hungry for new assets. traders and producers already coping with
International investors interested in the the pandemic’s fallout. Local pipeline
Aramco sends request to pipeline business include BlackRock, and networks, however, should help to alleviate
Brookfield Asset Management, sources have
some of the disruption.
banks for pipeline deal previously told Reuters. for European importers to avoid the Suez
“There are plenty of alternative trades
Aramco, the world’s largest oil exporter,
financing said on Sunday net profit fell 44.4% to 183.8 Canal,†said Ralph Leszczynski, head of
billion riyals ($49.01 billion) for the year
research at shipbroker Banchero Costa & Co.
Saudi Aramco has sent a request for proposals ended Dec. 31 as the COVID-19 pandemic Buyers in Europe and the U.S. may now
to banks for financing it wants to offer to depressed global crude demand. look to other regions, including the U.S. Gulf,
investors looking to lease its pipelines, three However it maintained its pledge to declare North Sea, Russia and West Africa, according
sources said, a sign the oil giant is progressing a $75 billion dividend for 2020, most of which to shipbrokers. Varieties including Mars Blend
with plans to extract value from its assets. goes to the Saudi government. from the U.S. Gulf, Urals from Russia, and
Aramco, which is being advised by REUTERS even Asian and Russian Far East grades are
JPMorgan and Japan’s MUFG on the likely to get a boost as a result of any increased
financing, has sent the request over the demand, an analyst and one of the shipbrokers
past few weeks to its relationship banks, TERMINALS & SHIPPING said.
meaning to banks that have already lent to the The logistical challenge comes at a volatile
company, said two of the sources. The sources Suez canal blockage time. Global benchmark Brent sank about
spoke on condition of anonymity as the 6% on Tuesday on concern near-term
matter is private. scrambles global oil and demand may prove weaker than expected
It is asking lenders to submit commitments amid renewed lockdowns. On Wednesday
for a loan that could go up to $10 billion in gas movement prices advanced, with at least 100 vessels
size, said the two sources. waiting to transit between the Red Sea and
Aramco and JPMorgan did not The blockage of the Suez Canal by a giant Mediterranean.
immediately respond to requests for container vessel is likely to send ripples of The canal is a crucial route, mainly used to
comment. MUFG declined to comment. disruption through the global energy supply transport Middle Eastern crude to Europe and
The planned pipeline transaction would be chain. the U.S., as well as shipping fuel oil from the
similar to infrastructure deals signed over the European and U.S. refiners that rely on the west to the east. The canal can take fully-laden
last two years by Abu Dhabi’s national oil vital waterway for cargoes of Middle Eastern Suezmax vessels that carry about 1 million
company ADNOC, which raised billions of oil may be forced to look for replacement barrels and bigger Very Large Crude Carriers,
dollars by leasing its oil and gas pipeline assets supplies should the blockage persist, as long as they transfer some cargo out of the
to investors, sources have previously said. potentially boosting prices of alternative vessel before transiting.
Aramco is preparing a so-called “staple grades. At the same time, flows of crude from On a daily basis, about 600,000 barrels
financing†for its bidders - a financing North Sea fields destined for Asia will be held of crude or less flow from the Middle East
package provided by the seller that buyers can up. to Europe and the U.S. via the canal, while
use to back their purchase. The critical trade route has been thrown volumes from the Atlantic Basin to Asia
One of the sources said the terms proposed into turmoil after the container ship ran total about 850,000 barrels a day, according
by the company were “aggressive†both aground on Tuesday, blocking traffic in both to Anoop Singh, head of East of Suez tanker
in terms of pricing and duration of the loan. directions. While the vessel is only likely to research at Braemar ACM Shipbroking Pte.
A second source said the terms reflected remain stuck for a couple of days, that’ll In addition, 400,000 barrels of naphtha go
market conditions, with Aramco taking be long enough to scramble some energy west-to-east through the waterway each day,
advantage of banks flush with liquidity and flows, creating an extra headache for refiners, while 300,000 barrels of middle distillates

Week 12 25•March•2021 www. NEWSBASE .com P15