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Nigeria tightens sulphur content limit on oil products

  • Market: Oil products
  • 14/03/24

Nigeria has set the sulphur content limit on refined oil products to 200ppm, effective from 1 March, according to a letter from the country's downstream regulatory body NMDPRA seen by Argus.

Oil products containing sulphur levels above 200ppm are no longer permitted to discharge in Nigeria, the NMDPRA said. The sulphur limit for all oil products will be gradually reduced to 50ppm, although a timeframe has not been given.

The regulator did not list penalties for non-compliance with the new sulphur cap but said market participants should be "mindful of the excess sulphur content in products going forward".

Some oil products recently imported to Nigeria contained up to 1,200ppm of sulphur, the NMDPRA said. The old sulphur cap in Nigeria was 1,000ppm for gasoline and 3,000ppm for diesel, according to one source.

Nigeria's new 650,000 b/d Dangote refinery is configured to produce Euro V specification oil products, which should mean its road fuels contain no more than 10ppm sulphur. But market participants say the refinery has yet to start up its secondary units, including desulphurisation units.

The Dangote refinery has offered at least one 60,000t cargo of 700ppm sulphur gasoil for loading on a Long Range 1 (LR1) vessel and has sold 20,000t of gasoil to a local downstream marketer, according to market participants.

The Netherlands, one of Europe's top gasoline suppliers to west Africa, tightened its rules on the quality of road fuel exports in April last year. It requires road fuels produced for export to low- and middle-income countries to adhere to a limit of 50ppm sulphur. Belgium is due to follow suit.


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25/10/24

B24 bunker demand in Asia, Middle East to rise in 2025

B24 bunker demand in Asia, Middle East to rise in 2025

Singapore, 25 October (Argus) — B24 bunker demand in the key ports of Singapore, Zhoushan and Fujairah will likely rise in 2025, because of increased demand ahead of the implementation of the EU's FuelEU maritime regulation. Regional demand for B24 — which consists of 24pc used cooking oil methy ester (Ucome) and 76pc very low sulphur fuel oil (VLSFO) — is expected to rise as shipowners prepare to meet more stringent mandates set by the EU and the International Maritime Organisation (IMO) from next year, said market participants. FuelEU Maritime aims to raise the share of renewable and low-carbon fuels in the fuel mix of maritime transport within the EU, and will set requirements for greenhouse gas emission reductions against a 2020 baseline level, starting with 2pc in 2025. The use of B24 is a relatively low-cost way to help meet the new mandate and is available at key ports globally. Competition for B24 is rising in Asia and the Middle East as port authorities revisit local rules and permits. The Zhoushan Port Authority will obtain the domestic blend permit by the end of the year, it said recently at a local conference,which will pave the way for key local refiners to blend and sell B24 to local and international shipowners. The quota is likely to be divided among Chinese majors like PetroChina (CNPC), Sinopec, and CNOOC. The port authorities further mentioned that CNPC and Sinopec are expected to each receive a blending quota of 200,000t of B24, while CNOOC will receive a blend quota of 100,000t in 2025. There were no further details available or any other formal announcement. But regional traders and shipowners, which have been waiting for the lifting of restrictions by the Chinese government, expect the move will allow shipowners more options to bunker B24 in this region. European market participants expect this B24 blending permit, if allocated, may pull some marine biodiesel demand towards Zhoushan and away from shipowners operating on east-west routes between Singapore and Europe.B24 blends in Zhoushan could end up pricing very competitively against VLSFO when EU emission trading system (ETS) costs are accounted for, given easing prices for Chinese-origin biodiesel, participants added. And FuelEU Maritime's pooling mechanism, which allows shipowners to pool different vessels together to achieve overall compliance across the pool, will enable shipowners that operate east-west routes to pool those vessels with other vessels that operate only within the EU — opening the door for marine biodiesel bunkered in Zhoushan to help meet FuelEU compliance. Singapore B24 consumption has been on the rise in Singapore, the world's largest bunkering hub, through 2024 because of demand from regional and international shipowners for refuelling of this blended marine fuels. B24 consumption touched 470,300t between January to September, according to data from the Maritime and Port Authority of Singapore (MPA). Demand for B24 is expected to near 800,000t by the end of 2024, up from 518,000t in 2023. Zhoushan remains competitively priced versus Singapore for VLSFO, with Singapore's delivered on board (dob) prices for the past year showing a $3/t premium versus Zhoushan on average, based on Argus data. But Singapore-based traders remain confident that the city-state will continue to lead the region in terms of B24 bunkering demand into 2025. "I think both ports will co-exist and there will be price competition…also it doesn't replace Singapore as the main port, do note," said a key global trader and refiner. Singapore is also the cheapest in terms of B24 pricing, compared with other key ports like Rotterdam and Fujairah. The spread between Singapore versus Rotterdam since 24 April shows a $94/t discount for bunkering in the former port, while the discount for Singapore with Fujairah stood at an average of $39.4/t, based on Argus data. Middle East Bunkering B24 has been picking up in the Middle East since the end of 2023, with sporadic demand trickling in this year. "We receive enquiries for B24 once or twice a month, sometimes even less than that for small volumes of 150-200t," one Fujairah-based trader said. But this could change following the implementation of the EU's FuelEU Maritime regulation from January 2025 . The EU is an important market and a regular destination for much of the maritime traffic passing through Fujairah, so the new regulations are likely to be a trigger for change, market participants said. "Many vessels refuel in Fujairah before calling at EU ports," one trader says. "They already have to comply with the EU ETS, [Carbon Intensity Index], and will need to also comply with FuelEU." By Mahua Chakravarty, Hussein Al-Khalisy and Elshan Aliyev Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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TotalEnergies Feyzin refinery issue hits bitumen supply


23/10/24
News
23/10/24

TotalEnergies Feyzin refinery issue hits bitumen supply

London, 23 October (Argus) — Bitumen production at the 109,300 b/d Feyzin refinery near Lyon, France has been hit following an issue with its sulphur recovery unit. Bitumen production is limited while the issue is resolved, according to sources. A market participants told Argus they had seen no bitumen production or supply available from Feyzin for the past week as a result of the issue. Feyzin previously had a reformer unit out due to a fire at the refinery in late August. By Fenella Rhodes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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UK bitumen demand outlook downbeat ahead of budget


23/10/24
News
23/10/24

UK bitumen demand outlook downbeat ahead of budget

London, 23 October (Argus) — The outlook for UK road construction and bitumen demand is downbeat, with no clear prospects of a recovery from years of weakening consumption ahead of the government's budget announcement on 30 October. Construction sector buyers and refinery suppliers at the recent Highways UK conference said road and highway spending, and resulting bitumen demand, is likely to remain slow, with the government unlikely to commit larger sums as it looks to tackle a £22bn ($28.6bn) "black hole" in government finances it says was left behind by the previous administration. A European construction firm with a UK project portfolio said a number of major highway projects it had expected to begin in 2025 will probably be postponed to 2026, as a start next year would have required funding to be allocated to them well before now. A firm with extensive UK project work said its activity and volumes had dropped this year but that it was hoping for no further falls in 2025. Some of the funds due to have been switched from the UK's ambitious high-speed rail (HS2) programme into road building could end up plugging the financial gap. The previous goverment in November last year pledged £8.3bn from a massively curtailed HS2 would be spent on resurfacing more than 5,000 miles (8,000km) of roads over an 11-year period. Some market participants pointed to the government's commitment to a major housebuilding programme as something that could, if public and private funds are forthcoming, generate a significant boost to bitumen demand for associated paving and roofing work. Fixing potholes Additional demand could be generated from pothole repair work, after the most recent annual Local Authority Road Maintenance (Alarm) survey showed a further deterioration in road surfaces because of real-term cuts in local authority maintenance budgets. Transport secretary Louise Haigh pledged in October to fix a "pothole plague" as part of a government plan to repair up to 1mn more a year. An October 2021 spending review by the previous government had pledged more than £2.7bn of local highway maintenance funding over the three tax years from 2022 to 2025 to local authorities outside London and the eight largest city regions. The funds, including monies to fix potholes, have failed to arrest a decline on UK roads. Motorist body AA said that up to September this year pothole related breakdown call-outs have increased by 2pc compared with the same period of 2023. The other leading UK body representing road users, RAC, said its pothole-related breakdown numbers went up by 10pc in the 12 months to 31 March. Government data show UK bitumen consumption slipped to 1.54mn t in 2023, the lowest since 2016 . Consumption was 1.89mn t in 2021 and 1.56mn t in 2022. In the first seven months of this year consumption was 835,000t, 9pc down from 917,000t in the same period of 2023. By Fenella Rhodes and Keyvan Hedvat Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Biomethanol, fuel oil demand up in Rotterdam port 3Q


23/10/24
News
23/10/24

Biomethanol, fuel oil demand up in Rotterdam port 3Q

London, 23 October (Argus) — Bunker fuel oil and biomethanol sales at the port of Rotterdam rose in the third quarter of this year, but those of gasoil and marine biodiesel fell, according to official port data. Very-low sulphur fuel oil (VLSFO), ultra-low sulphur fuel oil (ULSFO), and high-sulphur fuel oil (HSFO) sales all picked up on the quarter and on the year ( see table ). Participants attributed the increase in HSFO demand to the seasonal arrival of containerships at the port. HSFO demand rose in the previous quarter owing to re-routing of vessels because of chronic traffic disruption in the Red Sea. Ahead of the Mediterranean Sea becoming an emission control area (ECA) in May 2025, participants had pointed to expectations of firmer ULSFO demand in Europe for scrubber-less vessels operating between ECA zones. Vessels operating in ECA zones are be required to burn marine fuels with a sulphur content no higher than 0.1pc, rather than the global cap of 0.5pc. Combined sales for marine gasoil (MGO) and marine diesel oil (MDO) fell on the quarter and on the year in July-September. Market participants reported mostly lacklustre bunker fuel demand in the Amsterdam-Rotterdam-Antwerp (ARA) hub in that time, combined with tight prompt availability that weighed further on sales. Marine biodiesel blend sales declined sharply owing to a shift in voluntary demand east of Suez. B24 dob Singapore, a blend comprising VLSFO and used cooking oil methyl ester (Ucome), was an average of $715.56/t in July–September. This is lower than comparable assessed European blends, such as B30 Ucome dob ARA that averaged $804.71/t, B30 advanced fatty acid methyl ester (Fame) 0 dob ARA — which includes a deduction of the value of Dutch HBE-G renewable fuel tickets — at $738.12/t, and B24 Ucome dob Algeciras-Gibraltar at $784.12/t. Consequently containerships seeking to deliver proof of sustainability (PoS) documentation to their customers, to offset the latter's scope 3 emissions, shifted their marine biodiesel demand to Singapore when feasible. PoS can be obtained on a mass-balance system, allowing shipowners flexibility with regards to the port at which a blend can be bunkered. Biomethanol sales at the port of Rotterdam more than doubled on the quarter and soared by more than eight times on the year. Several shipping companies are leaning towards methanol and renewable methanol as alternative marine fuels to reduce their emissions. Danish shipping giant Maersk has ordered 24 methanol-powered container ships for delivery and commissioning during 2024-25, and Japanese classification society ClassNK said recently it expects 77 methanol-ready ships to be ordered by 2026, up from 27 newbuilds expected to be ordered this year. ESL Shipping said earlier this month it will build four new vessels that can run on biomethanol and green hydrogen-based e-methanol. Offtake agreements for renewable methanol are on the rise. Maersk has signed several letters of intent for procurement of biomethanol and e-methanol from producers such as Norway's state-controlled Equinor , Proman and OCI Global . Maersk has agreed to buy 500,000 t/yr from Danish shipping and logistics company Goldwind from 2024. Singaporean container shipping group X-Press Feeders said in 2023 it will buy biomethanol from OCI's Texas plant starting this year. By Hussein Al-Khalisy, Natália Coelho, and Evelina Lungu Rotterdam bunker sales t Fuel 3Q24 2Q24 3Q23 q-o-q% y-o-y% VLSFO & ULSFO 1,045,774 917,253 997,356 14.0 4.9 HSFO 906,737 825,125 790,195 9.9 14.7 MGO & MDO 334,752 369,267 379,142 -9.3 -11.7 Marine biodiesel blends 137,177 235,043 183,249 -41.6 -25.1 Total 2,424,440 2,346,688 2,349,942 3.3 3.2 LNG (m³) 220,120 242,931 204,418 -9.4 7.7 Biomethanol 2,066 950 250 117.5 726.4 Port of Rotterdam Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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MOH bitumen flows little impacted by refinery CDU halt


22/10/24
News
22/10/24

MOH bitumen flows little impacted by refinery CDU halt

London, 22 October (Argus) — A steady stream of bitumen export cargoes and truck supplies into inland markets have continued from Motor Oil Hellas' (MOH) 180,000 b/d Agioi Theodoroi refinery and terminal at Corinth despite the shut down of a crude distillation unit. The refinery was hit by a fire on 17 September which MOH said caused "damage" and injured three sub-contractors, adding that the refinery was running at a "lower capacity level" as a result. MOH has since remained tight-lipped about the operational status of the facility, although one of its crude distillation units (CDU) was shut as a result of the fire, and remains down, illustrated by considerably reduced crude deliveries . Bitumen trading, supply and buying firms on cargo and truck markets said the CDU halt, which they estimate could last 3-6 months, had caused no significant bitumen loading or supply issues, with production not as badly affected as for other products, most notably high-sulphur fuel oil (HSFO). The outage helped drive refining differentials for Rotterdam HSFO barges against front-month Ice Brent crude futures from their usual discounts to a premium for the first time since August 2023 . Bitumen market participants also pointed to weaker than expected demand in key export markets including Romania and much of north and central Europe ahead of the usual winter activity slowdown — along with the continued rainy season slowdown in west African road project activity and bitumen demand — as contributing to keeping bitumen cargo values down. A sustained flow of typically 4,000t bitumen cargoes exported by Greece's other refinery bitumen producer, Helleniq Energy, under tenders and spot deals — with a fresh sell tender on 18 October for a 4-6 November cargo loading at its 137,000 b/d Aspropyrgos refinery — has added to east Mediterranean oversupply. Market participants said the most recent MOH cargo offers for standard Mediterranean cargo sizes around 5,000t have been at fob discounts of around $10/t to fob Mediterranean HSFO cargoes, while Helleniq exports are indicated at fob discounts of at least $15/t, with no sign of a boost to differentials following the fire. The latest bitumen cargo to load at Agioi Theodoroi is on the 5,897dwt Iver Accord , which today left the terminal for Djen Djen, Algeria. The 7,944dwt Lilstella , under time charter with an international trading firm, will make its second consecutive bitumen cargo loading at Corinth when it arrives on 24 October, with the first loading proceeding under the pre-agreed dates before being shipped to Mohammedia with the same loading schedule expected for the second. Another international trading firm moved an Agioi Theodoroi cargo to Mohammedia, arriving 19 October on the 8,021dwt Poestella , again with no loading issues indicated. The 4,531dwt Stella Maris moved a cargo from Corinth to a Thessaloniki storage facility — arriving 2 October — for onward truck shipment to inland export markets including Romania, where Greek product remains highly price competitive. The only loading issues reported occurred over the few days following the 17 September fire when a large cargo loaded at the MOH terminal on the 45,986dwt Rubis Asphalt bitumen tanker Bitu Atlantic was delayed and its volume lower than planned. That shipment was moved to Rubis' west African terminal hub at Lome, Togo. The Corinth refinery is one of Europe's leading bitumen producing and exporting plants, last year exporting around 1.1mn t, up from just over 800,000t in 2022. Helleniq Energy increased its Aspropyrgos cargo exports to around 100,000t last year from 70,000t in 2022. Six bitumen cargoes totalling around 24,000t will have loaded at Aspropyrgos in the month to 25 October. By Keyvan Hedvat Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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