Page 12 - NorthAmOil Week 28
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US oil imports from Mexico surge to eight-year high
US-MEXICO
THE volume of crude oil imported from Mexico into the US jumped to its highest level in more than eight years in early June.
In the week ending July 3, US purchases rose to around 1.3mn barrels per day (bpd). Accord- ing to the US Energy Information Administra- tion (EIA), this is the highest gure posted since February 2012. It also brought US net imports in the same week to their highest level since August 2019, EIA data showed.
Information collected by the vessel-track- ing rm ClipperData showed that the Mexican supplies were delivered to 10 terminals. More than half of the total ended up at the Deer Park re nery owned by Royal Dutch Shell (UK/Neth- erlands) and the Port Arthur plant owned by Valero Energy (US).
e other destination included Gulf Coast re neries owned by Marathon Petroleum (US) and Valero, as well as a refinery in Houston owned by LyondellBasell Industries (Nether- lands), market sources told Reuters.
e surge in delivery volumes came a er a re hit Mexico’s largest re nery in Salina Cruz late last month. e blaze led Mexico’s national oil company (NOC) Pemex to offload more barrels rather than reserve them for processing.
Pemex also opted not to put extra oil into storage, as its inventories have swelled since the corona- virus (COVID-19) pandemic began cutting into demand.
Mexico has held o making deep production cuts in spite of the chaos unleashed on global markets by the pandemic. It is currently pro- ducing nearly 1.8mn bpd of oil but has not so far indicated any plans to curb output.
Instead, Mexican President Andres Manuel Lopez Obrador has said that the country is intending to increase domestic re ning capacity by continuing to construct a new re nery while also upgrading existing facilities. In April, he declared that work on the $8bn Dos Bocas re n- ery project would not be postponed or cancelled. e plant, which is already under construction in the southern Mexican state of Tabasco, will be able to process 340,000 bpd of heavy crude oil.
The government is hoping that this ambi- tious project will end Mexico’s dependence on imported re ned products, most of which come from the southern US states of Texas and Loui- siana. In January, the Bank of China (BoC) and the Industrial and Commercial Bank of China (ICBC) pledged to provide $600mn in funding for the re nery.
Gas flows to US LNG terminals fall to new lows
US
NATURAL gas ows to US liquefaction termi- nals fell to new lows in July, having already regis- tered a 20-month low in June as the coronavirus (COVID-19) pandemic continues to weigh on demand for the super-chilled fuel.
Last week, Re nitiv data showed that in the month so far up to July 8, pipeline gas ows to US LNG export terminals averaged 3.1bn cubic feet (87.8mn cubic metres) per day. is marked a drop from 4.1 bcf (116.1 mcm) per day in June, and a record high of 8.7 bcf (246.4 mcm) per day in February, according to the data.
e utilisation rate of the US’ LNG plants is estimated to have fallen from 85-90% in 2019 to just 32% in the rst week of July. is comes a er various buyers cancelled more cargoes due for loading at US terminals this summer than had been expected weeks ago. More than 70 cargoes have been estimated to have been can- celled for loading in June and July, and a further 40-45 cargoes due to be loaded in August are
also thought to have been cancelled.
Re nitiv data also showed that in that rst
week of July, only ve vessels had picked up cargoes from any of the six US LNG export terminals. Cheniere Energy’s Sabine Pass LNG and Sempra Energy’s Cameron LNG reportedly accounted for two cargoes each, while the remaining cargo was shipped from Dominion Energy’s Cove Point facility in Maryland.
Federal data show that the number of monthly cargoes of LNG being shipped from US terminals peaked at 74 in January, and had fallen to 57 in May – the latest month for which data are available. Re nitiv estimates that only 31 cargoes were exported in June.
Simmons Energy analysts have projected that US LNG utilisation rates will stay at around 60-70% over the next few years. New liquefac- tion capacity is still starting up, and this threat- ens to prolong the period of low utilisation.
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w w w . N E W S B A S E . c o m Week 28 16•July•2020
