The Nigerian National Petroleum Company Limited has sold the first cargo of Port Harcourt refinery low sulfur straight run fuel oil, LSSR, to Dubai-based Gulf Transport & Trading Limited, GTT.
The company is expected to load the cargo in the coming days onboard the Wonder Star MR1 ship, signalling the commencement of operations at the plant and the exportation of petroleum products.
A report by a data and analysis company, Kpler on Friday stated that the refinery started up its Coolant Distribution Unit 1 this week, with its estimates pinning operations at 20,000 barrels per day.
It stated that the 60,000bpd facility, currently operating at 70 per cent capacity, sold its first low sulfur straight run fuel oil cargo, pointing to a gradual and phased start-up of operations.
The ship will load 15,000 metric tons of the product, which translates to about 13.6m litres.
The report said: “Port Harcourt sold its first LSSR cargo, with a sulfur content of 0.26 per cent wt and a 0.918 g/ml density at 15°C, to Dubai-based Gulf Transport & Trading Limited. Loading onboard the Wonder Star MR1 in the coming days. The 15,000 metric tonnes cargo, sold at a $8.50/t discount to the NWE 0.5 per cent benchmark on an FOB basis.”
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While this will have a limited impact on global VLSFO benchmarks for now, the latest development changes market realities for Atlantic Basin exporters of clean products into Nigeria and the wider region.
Kpler reported that the development would help displace imports from traditional suppliers in Africa and Europe, as Nigeria’s falling clean product imports are already decreasing, dragging imports into the wider West Africa region lower as well.
It added that the LSSR was produced from the 60,000 bpd section of the refurbished Port Harcourt refinery following a November 26 announcement that it began processing crude oil.
“LSSR production from this train is expected to steady at about 60,000 metric tonnes per month over the near term. The larger 150,000 bpd section of the refinery, however, remains offline and will start up after production from the first phase stabilizes,” it noted.
Continuing, the report said a potential ramp-up to full capacity of 210,000 bpd would weigh on fuel imports to the country after Dangote’s rising refinery runs already pressured gasoline imports to multi-year lows since October.
NNPCL stated on 26 November that CDU 1 at Port Harcourt had started operations, also claiming that product exports via trucks had commenced.
Kpler’s in-house crude stocks data corroborates that test runs have been ongoing, with PPMC inventories dropping from 1.5m barrels in August to 1.3Mbbls in October to around 1Mbbls in November (current crude inventories would enable refinery runs of around 30 for one month).
The full ramp-up of the refinery will further improve West African gasoline balances and weigh on fuel imports to Nigeria, a dynamic that is already at play, with October and November seeing gasoline imports to the country drop to the lowest levels in seven years.
Credible News.ng
