Page 8 - AfrElec Week 38

AfrElec COMMENTARY AfrElec
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 produc- tion will be fully restored by the end of the month.”
The report noted that while other distrib- utors Idemitsu Kosan and Cosmo Energy had not been informed of any changes, all three had been told to anticipate delays for October ship- ments of several days.
Reuters quoted a Chinese official as say- ing last week that Aramco had informed Pet- roChina that some light crude loadings for October would be delayed by around 10 days as a result of the outage, while some light Sep- tember shipments 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 Kalamos 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 refining source telling Reuters that VLCC Tango was still awaiting its Banoco Arab Medium crude load. He said that 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 information 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 indus- try estimates of 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 opera- tions, these will take some time.™
FUELS
Fuel price pinch in East Africa
EAST AFRICA
KENYA this week raised fuel prices following a review by the governing authority, while Ugan- danfueldealersbegantostockpileinthewakeof the Saudi production drop.
The Kenyan Energy and Petroleum Regu- latory Authority (EPRA) announced that the prices for super petrol and diesel would increase by KES0.28 ($0.003) and KES2.44 ($0.02) per litre respectively, while the price for kerosene fell by KES3.31 ($0.04).
The prices of these fuels in Nairobi are now KES112.81 ($1.09), KES103.04 ($0.99) and KES100.64 ($0.97) respectively. Meanwhile, prices in the port of Mombasa have been set at KES110.19 ($1.06) for super, KES100.44 ($0.97) for diesel and KES98.03 ($0.94) for kerosene.
Kenya’s consumption of refined oil products declined in 2018 by 6% to 5.92bn litres because of increased taxes and reduced economic activity.
The Petroleum Institute of East Africa (PIEA) said that usage of oil products had dropped from 6.29bn litres in 2017 because of higher fuel taxation, reduced transport of cargo by road and thermal generation decline because of the increasing availability of renewable energy.
“Equalisation of diesel and kerosene had
impact in demand for kerosene. Heavy fuel oil decline relates to increase of wind and geother- malofpowerinjectedtothenationalgrid,”PIEA general manager Wanjiku Manyara.
She said that the transport of goods from Mombasa sea port by road to the capital Nairobi had declined as more cargo shifted to standard gauge railway (SGR), reducing the diesel used by trucks.
Fuel dealers in Uganda are stockpiling follow- ing the news of Saudi production going offline. Without its own refinery, Uganda is reliant on imports to cover demand, and the impact of higher global crude prices normally takes around a month to be reflected in pump prices.
Uganda’s Observer daily quoted Uganda National Oil Co. general manager John Bosco Habumugisha as saying that facilities in Jinja are well stocked, while Daniel Mushabe, the general manager of Mount Meru Petroleum, told URN that “many players were seen ordering more than usual quantities” the day markets opened after the attack. One trader told The Observer that marketers would embrace the opportunity to make money even though supplies are actu- ally in plentiful supply.™
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w w w . N E W S B A S E . c o m Week 38 25•September•2019