Singapore fuel oil stockpiles at four-week low as imports drop, exports rise

Singapore's onshore fuel oil stockpiles fell to a four-week low as imports dropped and exports rose, as per Hydrocarbonprocessing.

Inventories for fuel oil dipped 1.5% to 21.09 million barrels (3.32 million metric tons) in the week ended April 3, latest data from Enterprise Singapore showed.

Net imports, which are calculated by subtracting total exports from total imports, were at about 495,000 tons, nearly halving from last week, calculations based on the data showed.

Brazil was the top destination for arrivals into landed storage, followed by the United Arab Emirates and Kuwait.

Total imports dropped for a second consecutive week, while exports recovered after a sharp decline last week. Top destinations for outflows from Singapore were China, Philippines and Australia in the week, the data showed.

While onshore stockpiles dipped week-on-week, trade sources said that overall inventories remained ample as East Asia received an influx of supplies last month.

As such, the Asia fuel oil market remains in a supply overhang this month, with some sellers clearing stocks.

We remind, Japanese plastic maker Kuraray will construct a USD410 million plant in Singapore under plans announced Tuesday, aiming to boost output of a packaging material that helps to reduce food waste. The new plant will produce EVOH, a proprietary resin that helps block oxygen and prevent food from spoiling. Operation will begin at the end of 2026, marking Kuraray's first time producing the material in Southeast Asia.

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Epigral announced the successful commissioning of an additional 45,000 TPA (Tonnes Per Annum) capacity of CPVC (Chlorinated Polyvinyl Chloride) resin plant at its Dahej facility in Gujarat, said Business-standard.

With this expansion, Epigral's total CPVC resin capacity reaches a remarkable 75,000 TPA, positioning it as the largest CPVC resin facility in the world at a single location.

In addition to the CPVC resin capacity expansion, Epigral is also venturing into CPVC compound production, with a projected capacity of 35,000 TPA. The project is under progress and is expected to be commissioned in the first quarter of the financial year 2025.

CPVC resin and compound are integral components in the manufacturing of CPVC pipes and fittings, renowned for their high heat and chemical resistance properties, thus making them suitable for both domestic and industrial applications. India's CPVC demand is approximately 2,50,000 tonnes per annum (TPA) and is still developing, with an annual growth expected to range between 10% and 13%. Epigral's strategic expansion into this sector demonstrates the company's pledge to innovation and sustainability.

We remind, India has initiated an anti-dumping investigation on imports of Poly Vinyl Chloride (PVC) Resin (suspension grade) from seven countries - China, Indonesia, Japan, South Korea, Taiwan, Thailand, and the United States. The Directorate General of Trade Remedies (DGTR), under the Commerce and Industry Ministry, has launched this probe in response to a petition filed by three of the five domestic producers of 'PVC Suspension Resins' in India.

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Japan’s Mitsui O.S.K. Lines Ltd (MOL) has started commercial operations of its floating storage and regasification unit (FSRU) to supply liquefied natural gas to a power plant in West Java, Indonesia, as per Reuters.

This project is Asia’s first gas-to-power project using an FSRU, MOL said. The operations of the FSRU, called Jawa Satu, began on March 29. MOL owns Jawa Satu, through PT Jawa Satu Regas, jointly established by PT Pertamina (Persero), Marubeni Corporation Sojitz Corporation and other partners.

With a storage capacity of 170,000 cubic meters and a regasification capacity of 300 million standard cubic feet per day (MMcsfd), Jawa Satu will receive LNG for power generation from LNG carriers via ship-to-ship transfer before supplying it to the Jawa 1 power plant.

The plant, which also began operations on March 29 by PT Jawa Satu Power, has a generating capacity of 1,760 megawatts and is located in Cilamaya, West Java, the company added. It is also jointly owned by Pertamina, Marubeni and Sojitz.

Electricity generated by the power plant will be supplied to Indonesian state-owned electricity company PT PLN (Persero) for 25 years.

We remind, Japanese oil refiner Idemitsu Kosan, opens new tab and Mitsui Chemicals, opens new tab plan to consolidate their ethylene complexes in Chiba near Tokyo, they said on Wednesday, as the industry is under pressure from competition with China. The companies would consider closing Idemitsu's Chiba ethylene facility to consolidate production at Mitsui Chemical's site in the 2027 fiscal year. The new business would be operated by a limited liability partnership or a joint venture.

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Mexico's presidential front-runner Claudia Sheinbaum plans to invest in state-owned Pemex' oil refineries to reduce the huge volumes of low-value fuels produced and instead boost the output of motor fuels, one of her advisors said, said Reuters.

Pemex has been producing record levels of heavy fuels, such as the particularly polluting fuel oil, as its local refineries struggle to process the heavy Maya crude it pumps. Last year, Pemex produced 260,285 bpd of fuel oil - exceeding the production of gasoline at 252,203 bpd.

Considered a waste product, in Mexico fuel oil is mainly burnt for electricity generation. "Refineries are very expensive and important assets to reach energy self-sufficiency," said Jorge Islas, the energy coordinator for Sheinbaum, in an interview on Wednesday.

Islas, a physicist and doctor in economics, pointed to the possibility of building a new coking unit at the Salamanca refinery to increase gasoline and diesel production. Currently, the refinery is operating at just over half of its capacity.

Coking units are able to process the heavier hydrocarbons coming out of distillation towers into higher-value products, including motor fuels.

Under President Andres Manuel Lopez Obrador, Pemex has invested billions of dollars to rehabilitate its six obsolete domestic refineries. Refining has been a loss-making business for Pemex for years.

In order to wean the country off expensive imports, Pemex also formally inaugurated the new Dos Bocas refinery in July 2022, despite running late and over budget by several billions of dollars. While the 340,000-bpd refinery is operational, it does not yet produce finished fuels.

Pemex already has two new coking plants in Salamanca and Tula which are expected to come into operation between this year and next.

Lopez Obrador had promised that Mexico would achieve "energy sovereignty" during his six-year term. However, a few months before he leaves office on Oct. 1, the goals seem complex to achieve even as refineries have improved their performance.

The six local refineries together have the capacity to process 1.6 million bpd. However, in the first two months of this year, they processed an average of 945,000 bpd - above the 612,000 bpd in 2018 they processed before Lopez Obrador took office but still well below capacity.

With the Dos Bocas refinery set to fully operate this year, and Pemex also wanting more crude for its other refineries, it has asked its commercial unit TRI to cut crude exports this month by 436,000 bpd.

The government plans to continue reducing its exports, which amounted to 945,000 bpd in the first two months of this year.

Islas reiterated that according to Sheinbaum's plan, production would be at around 1.8 million bpd of crude oil and condensate even after there have been few large discoveries of reserves.

We remind, Pemex’s Deer Park, Texas refinery was operating at 80% of its 312,500 bpd capacity, said people familiar with plant operations. Pemex reduced production at the refinery prior to a winter storm’s passage across the Texas Gulf Coast on Monday, the sources said.

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Gazprom Neft intends to reduce oil production to the level required by Russia to meet the OPEC+ quota by the end of April, Alexander Dyukov, Chairman of the company's management board, told reporters, as per Interfax.

"The quota is usually communicated to us by the Energy Ministry, we fulfill it. We plan to reach the required volume of production cuts by the end of the month," Dyukov said.

As reported, Russia within the framework of OPEC+ in the second quarter is moving from the reduction of exports to a real reduction in production. The country will reduce production and exports by a total of 471,000 bpd with a different structure in each month: in April, Russia will reduce production by 350,000 bpd and exports by 121,000 bpd; in May - by 400,000 bpd and 71,000 bpd respectively; in June, it will only reduce production by 471,000 bpd.

Russia's official oil production quota for 2024 under OPEC+ is 9.95 million bpd. Given the voluntary production cut announced in April 2023 for the whole of 2024 it will be 9.5 million bpd. Thus, in April, Russia's production will have to total 9.1 million bpd, in May - 9.05 million bpd and in June - 8.979 million bpd, which corresponds to Saudi Arabia's quota.

We remind, Russia plans to re-commission a number of oil refineries after repairs in the next couple of months, Energy Minister Nikolai Shulginov told reporters. "Repairs are underway at the refineries. We plan to re-launch a number of refineries after repairs in April-May, possibly before the beginning of June," Shulginov said. "All facilities that were damaged will be re-commissioned," Shulginov said.

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