Russia cuts fuel oil supplies by rail for further export by 1.2% in January

Russia reduced fuel oil supplies via rail for further export by 1.2% in January from the same month a year ago and by 6.2% from December amid refinery outages, according to industry sources and Reuters calculations, said Hydrocarbonprocessing.

Russia's energy infrastructure has been hit by drone attacks and fires in the past month, adding to uncertainty in global oil and gas markets already rocked by the conflict in the Middle East.

The Baltic Sea port of Ust-Luga remained the main destination for Russian fuel oil, handling some 46% of total supplies. At the same time, fuel supplies to the terminal fell by 18% both from January 2023 and December to 1.177 million metric tons last month as producers redirected supplies to other ports.

Fuel oil deliveries to the domestic market fell by 8.9% last month from January 2023 and by 5.8% from December to 718,000 tons, according to the sources and Reuters calculations.

Russian oil refineries in January reduced processing by 4% from a year before and 1.4% from the prior month due to drone attacks and outages, Kommersant daily reported last week, citing industry sources.

We reminnd, India has resumed imports of Russian Sokol oil after a two-month gap with at least two refiners so far taking deliveries of the light sweet crude in February, four trade sources said and ship tracking data showed. India's Hindustan Petroleum Corp HPCL.NS has bought Sokol oil from a trader, the sources said. HPCL is likely to pay for the oil in UAE dirhams, three of them added.

mrchub.com

India resumes buying Russian Sokol oil after 2-month hiatus

India has resumed imports of Russian Sokol oil after a two-month gap with at least two refiners so far taking deliveries of the light sweet crude in February, four trade sources said and ship tracking data showed, said Hydrocarbonprocessing.

India's Hindustan Petroleum Corp HPCL.NS has bought Sokol oil from a trader, the sources said. HPCL is likely to pay for the oil in UAE dirhams, three of them added. Indian state refiners had to stop buying the grade last year after the government advised them against using Chinese yuan to pay for Russian oil amid strained relations between New Delhi and Beijing.

That led to more than 10 million barrels of unsold Sokol floating in seaborne storages in one of the biggest disruptions to Russian oil trade since the West imposed sanctions on Moscow over its military actions in Ukraine. India did not receive Sokol oil in December and January, data from trade sources and the ship tracking data shows.

The vessel Seagull, carrying about 95,000 metric tons of Sokol, discharged at India's western Mumbai port on Feb. 13, the LSEG ship tracking data shows. HPCL rarely bought Sokol in the past. It previously bought the grade for delivery at Mumbai in August, according to the LSEG data. HPCL did not immediately respond to a request for comment.

In February, private refiner Nayara Energy, majority-owned by Russian entities including oil major Rosneft ROSN.MM, also took a delivery of Sokol oil, the data shows. LSEG data also shows that three vessels carrying Sokol oil - NS Lion, NS Antarctic and Raven - are expected to arrive at the eastern ports of Paradip and Visakhapatnam later this month.

The sources said Russia would look at selling Sokol oil through trading firms to reduce surplus floating stocks in the Pacific. Selling via a trader will help Russia get steady payments, though that will reduce discounts for the buyer, they said. Sokol oil is exported by Sakhalin-1 LLC, a subsidiary of Russian oil giant Rosneft, which is also a seller of the grade.

Rosneft did not immediately respond to a request for comment. Indian Oil CorpI, the country's top refiner, was one of the key buyers of Sokol oil under its annual contract with Rosneft.

It had to stop buying the grade because Sakhalin 1 LLC has been unable to open an account with a bank in the UAE to accept dirham payments. Earlier this month, China took two cargoes of Sokol oil, LSEG and Kpler data showed and traders said.

We remind, Rosneft-owned Tuapse oil refinery on the Black Sea will not resume operations this month, at the very least, sources, familiar with the maintenance schedule. Rosneft, Russia's largest oil producer, did not reply to a request for immediate comment. Russia has been beset in the past month by a number of refinery outages triggered by fires or suspected drone attacks, prompting authorities to reduce fuel exports to safeguard the domestic market.

mrchub.com

Fire at Equinor's Mongstad, Norway oil refinery extinguished

Fire at Equinor's Mongstad, Norway oil refinery extinguished

Equinor on Thursday said the fire that shut its Mongstad oil refinery in western Norway had been extinguished, said Hydrocarbonprocessing.

Equinor said in a statement that the fire, in an electrical kiosk at the refinery, had been extinguished and that emergency personnel were sent for routine medical follow-up.

Equinor shut down production as a preventive measure earlier on Thursday and evacuated non-essential personnel from the site. "It is too early to say anything about the cause of the incident," the company said in a statement.

There was significant smoke coming from the fire but no need to evacuate homes located in the vicinity, police said.

The wider Mongstad area contains refinery operations and a terminal for crude oil exports as well as other facilities.

We remind, a meeting was held between the President of the State Oil Company of Azerbaijan Republic (SOCAR), Rovshan Najaf, and the delegation led by Equinor’s Executive Vice President for International Exploration and Production, Philippe Mathieu. During the meeting, agreements were signed for SOCAR's acquisition of Equinor’s shares in the Azeri-Chirag-Gunashli (ACG) and Karabakh fields, as well as the Baku-Tbilisi-Ceyhan (BTC) pipeline project.

mrchub.com

Marathon's Detroit refinery workers aim to work out contract without strike, union says

Marathon's Detroit refinery workers aim to work out contract without strike, union says

Teamsters, one of America's biggest unions, said it wants to negotiate a new contract with Marathon Petroleum for its members at the Detroit refinery without having to go on a strike, said Hydrocarbonprocessing.

There are 270-280 Teamsters working at the refinery in a variety of roles, according to the union, of which 273 workers voted to authorize a strike at the Detroit refinery on Thursday, with their most recent contract having expired last month.

"We don't have a date set for a strike, nor do we have a timeline if it comes to that. Our goal is to settle the contract in bargaining without having to go on strike," the Teamsters spokesperson said.

The refinery has a crude oil refining capacity of 140,000 barrels per day and processes sweet and heavy sour crude oils into products such as gasoline and distillates.

We remind, Marathon Petroleum Corp (MPC) reported net income of $1.5 bn for 4Q 2023, compared with net income of $3.3 bn for 4Q 2022. The 4Q 2023 adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) was $3.5 bn, compared with $5.8 bn for 4Q 2022. The decrease in net income and adjusted EBITDA from a year ago was driven by lower refining margins. In 4Q 2023, the company returned approximately $2.8 bn of capital to shareholders through $2.5 bn of share repurchases and $311 M of dividends.

mrchub.com

Shell invokes force majeure for butadiene supply to the US

Shell invokes force majeure for butadiene supply to the US

In early February, Royal Dutch Shell, a prominent Anglo-Dutch oil and gas company, declared force majeure concerning the supply of butadiene to its facility in Norco, Louisiana, USA, said Chemanalyst.

Market reports have confirmed the shutdown of a line with a substantial capacity of 265,000 tonnes of butadiene annually. This operational halt is anticipated to persist at least until the conclusion of February, with the precise cause of the disruption remaining undisclosed.

The declaration of force majeure signifies a contractual clause invoked by Shell, releasing the company from its obligations due to unforeseen and uncontrollable circumstances. For clients dependent on the Norco site for butadiene supply, this triggers a series of limitations and disruptions in the expected deliveries.

This recent force majeure event echoes a similar occurrence in the Shell portfolio, as on March 25, 2022, the company had previously announced force majeure for the butadiene supply at its Moerdijk facility in the Netherlands. The rationale behind this prior declaration was a technical issue, specifically a steam leak, affecting a 115,000-tonne per year line. This incident led to the incapacitation of a cracking unit, prompting Shell to invoke force majeure for the butadiene supply.

The declaration of force majeure in Norco, Louisiana, raises questions about the operational resilience and supply chain dynamics within Shell's butadiene production network. The unavailability of precise details regarding the cause of the disruption adds an element of uncertainty, leaving industry stakeholders and clients keenly awaiting further insights from the company.

As the force majeure situation unfolds, the affected clients at the Norco site must navigate through the challenges posed by restricted butadiene supply. This disruption may have implications for downstream industries dependent on butadiene, a key ingredient in the production of various synthetic rubbers and plastics.

Shell's proactive response to unforeseen technical challenges underscores the complexities inherent in the operation of petrochemical facilities. The company's commitment to transparency and effective communication with its clients will be pivotal in managing the impact of the force majeure on butadiene supply.

The force majeure declaration by Royal Dutch Shell for butadiene supply to its Norco facility in Louisiana introduces a level of uncertainty and disruption in the downstream petrochemical supply chain. The ongoing challenges faced by Shell, coupled with a recent similar incident in the Netherlands, highlight the intricate nature of operating facilities that are crucial to the global energy and chemical sectors. As industry participants await more information on the causes and resolutions of these disruptions, the resilience and adaptability of companies like Shell will be critical in navigating the complexities of the evolving petrochemical landscape.

We remind, in early February, Royal Dutch Shell, a prominent Anglo-Dutch oil and gas company, declared force majeure concerning the supply of butadiene to its facility in Norco, Louisiana, USA. Market reports have confirmed the shutdown of a line with a substantial capacity of 265,000 tonnes of butadiene annually. This operational halt is anticipated to persist at least until the conclusion of February, with the precise cause of the disruption remaining undisclosed.

mrchub.com