MOSCOW (MRC) -- Guyana's government will sell the first three cargoes of the new Liza crude produced offshore Guyana to a trading arm of Shell on a Dated Brent basis, reported S&P Global with reference to the country's Department of Energy's statement Tuesday.
Guyana did not reveal the price and volume for the cargoes, which represent the country's share of the production. However, it said the direct sale was to Shell Western Supply and Trading and the first lift is expected to take place in February, with the loading of the three cargoes completed by mid-2020.
"The sale has been premised on a Dated Brent price basis which reflects the tradable, spot market value of crude oil," the government said in a statement.
The decision to sell the crude will provide competitive pricing that will limit the Guyanese government's exposure to market uncertainty, according to the statement.
Shell emerged the winner to buy the government's first cargoes and was selected from a group of other international oil companies.
The Guyanese government is planning a second phase for selling its crude by launching an open market search for a marketing agent that will market the country's crude entitlements from the Liza 1 field on a term basis.
It has been an eventful week regarding Guyana's offshore crude oil. An ExxonMobil-led group announced late last week that production of Liza crude had begun ahead of schedule. China's CNOOC and Hess are also partners in the Stabroek consortium.
Exxon and its partners on Monday said that they made another oil discovery called Mako, located offshore Guyana, adding to anticipated Liza production.
Liza Phase 1 is producing from the Destiny floating, production, storage and offloading facility and will peak at 120,000 b/d of oil over the next several months. Liza Phase 2, which will use the FPSO Unity, was sanctioned this year and is expected to produce up to 220,000 b/d when it comes online in mid-2022.
It's a monumental development for the small South American country, which before now has seen no oil and gas production and has no local refineries.
Liza crude is considered medium sweet with a typical gravity of 32.1 API and sulfur content of 0.51%.
As MRC informed before, Shell Singapore restarted its naphtha cracker in Bukom Island in the first week of December, following a two months maintenance shutdown since the beginning of October 2019. Thus, this cracker was taken off-stream for the turnaround on 1 October 2019. The cracker is able to produce 960,000 tons/year of ethylene and 550,000 tons/year of propylene.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 tonnes in the first ten months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.
Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC