Saudi Aramco to begin ULSD exports from Jizan in May

Market: Oil products
18/05/22

State-controlled Saudi Aramco's trading arm ATC is set to start loading ultra-low sulphur diesel (ULSD) cargoes for May and June from Aramco's 400,000 b/d Jizan refinery on Saudi Arabia's Red Sea coast, according to market sources. This suggests that the refiner has started commercial production of the product since at least this month.

Market sources said that around 250,000t (1.86mn bl) will be loaded in May — one Long Range (LR) 2, which has the capacity of more than 75,000t and two LR1s with a capacity of 55,000t — and around 250,000-300,000t of ULSD will load from the refinery next month. Aramco has yet to respond to a request for comment.

So far, ship tracking data from Vortexa shows that ATC has already booked the Tavistock Square to load 30,000t on 27 May. Market participants expect the ULSD cargoes to head to Europe, but so far Vortexa shows east Africa as the final destination.

Meanwhile, shipping fixtures show that ATC placed the same tanker on subjects to load 90,000t of ULSD instead from Jizan on 23-24 May to head to east Africa. ATC also placed the Torm Sara on subjects to load 60,000t of ULSD from Jizan on 22-23 May to Egypt's Ain Sukhna, according to fixtures lists.

Arbitrage to Europe from east of Suez has been uneconomical since mid-April because of the significantly narrower gasoil east-west spread, or front-month Singapore gasoil swaps against front-month Ice gasoil futures. But given the refinery's strategic location, flows from Jizan to Europe and Africa are more economical than from other exporting countries like south and east Asia, which could impact the volumes out of India, a leading exporting country.

Market sources said this suggests that Aramco has likely only been able to commission its diesel production units fully this month — most likely hydrocracking units — as it has been producing high-sulphur diesel (HSD) since at least February 2021. This has not been confirmed by the firm.

The refinery began operations last year and has been operating at 50pc of capacity since at least December. It is unclear what capacity it is operating at the moment. But at full capacity the facility will produce more than 200,000 b/d of ULSD. It can also produce more than 70,000 b/d of gasoline and more than 48,000 b/d of fuel oil at full capacity. A gasoline cargo loaded in mid-March from Jizan — the Altesse — which suggests that the isomeration and reformer units had already started operations at that point. But this could not be confirmed with the refiner.

Jizan is an integrated refinery and is one of the country's most complex, producing low-sulphur fuels, petrochemicals from naphtha as well as housing gasification and power facilities. It began tests in January 2021 after an eight-year build, having been planned for start-up in 2018.

By Sarah Raffoul

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22/11/24

Cop: Drafts point to trade-off on finance, fossil fuels

Baku, 22 November (Argus) — The new draft on the climate finance goal from the UN Cop 29 climate summit presidency has developed nations contributing $250bn/yr by 2035, while language on fossil fuels has been dropped, indicating work towards a compromise on these two central issues. There is no mention of fossil fuels in either the new draft text on the global stocktake — which follows up the outcome of Cop 28 last year, including "transitioning away" from fossil fuels — or in the new draft for the climate finance goal. Developed countries wanted a reference to moving away from fossil fuels included, indicating that not having one would be a red line. The new draft text on the climate finance goal would mark a substantial compromise for developing countries, with non-profit WRI noting that this is "the bridging text". Parties are negotiating the next iteration of the $100bn/yr that developed countries agreed to deliver to developing nations over 2020-25 — known as the new collective quantified goal (NCQG). The new draft sets out a figure of $250bn/yr by 2035, "from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources". It also notes that developed countries will "take the lead". It sets out that the finance could come from multilateral development banks (MDBs) too. "It has been a significant lift over the past decade to meet the prior, smaller goal... $250bn will require even more ambition and extraordinary reach," a US official said. "This goal will need to be supported by ambitious bilateral action, MDB contributions and efforts to better mobilise private finance, among other critical factors," the official added. India had indicated earlier this week that the country was seeking around $600bn/yr for a public finance layer from developed countries. Developing countries had been asking for $1.3 trillion/yr in climate finance from developed countries, a sum which the new text instead calls for "all actors" to work toward. The draft text acknowledges the need to "enable the scaling up of financing… from all public and private sources" to that figure. On the contributor base — which developed countries have long pushed to expand — the text indicates that climate finance contributions from developing countries could supplement the finance goal. It is unclear how this language will land with developing nations. China yesterday reiterated that "the voluntary support" of the global south is not part of the goal. The global stocktake draft largely focuses on the initiatives set out by the Cop 29 presidency, on enhancing power grids and energy storage, though it does stress the "urgent need for accelerated implementation of domestic mitigation measures". It dropped a previous option, opposed by Saudi Arabia, that mentioned actions aimed at "transitioning away from fossil fuels". Mitigation, or cutting emissions, and climate finance have been the overriding issues at Cop 29. Developing countries have long said they cannot decarbonise or implement an energy transition without adequate finance. Developed countries are calling for substantially stronger global action on emissions reduction. By Georgia Gratton and Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Singapore light distillate stocks hit seven-week high

22/11/24

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22/11/24

Singapore light distillate stocks hit seven-week high

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Pemex's lean Zama spending undercuts goals

21/11/24

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21/11/24

Pemex's lean Zama spending undercuts goals

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Cost of government support for fossil fuels still high

21/11/24

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21/11/24

Cost of government support for fossil fuels still high

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Cop: Talks in Baku torn between mitigation and finance

21/11/24

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21/11/24

Cop: Talks in Baku torn between mitigation and finance

Edinburgh, 21 November (Argus) — Developing and developed nations remain at loggerheads on what progress on climate finance and mitigation — actions to cut greenhouse gas emissions — should look like at the UN Cop 29 climate summit. But Cop 30 host Brazil has reminded parties that they need to stick to the brief, which is finance for developing countries. Concluding a plenary where parties, developed and developing, listed grievances, environment minister Marina Silva recognised "the excellent progress achieved" on mitigation at Cop 28. She listed paragraphs of the Cop 28 deal, including the energy package and its historic call to transition away from fossil fuels in energy systems. "We are on the right track," she said, talking about mitigation, but "our greatest obligation at this moment is to make progress with regard to financing". "This is the core of financing that will pave our collective path in ambition and implementation at Cop 30," Silva said, adding that $1.3 trillion for developing countries should be "the guiding star of this Cop". Parties are negotiating a new collective quantified goal (NCQG) — a new climate finance target — building on the $100bn/yr that developed countries agreed to deliver to developing countries over 2020-25. But developed countries insist that a precise number for a goal can only be produced if there is progress on mitigation and financing structure for the NCQG. "Otherwise you have a shopping basket but you don't know what's in there," EU energy commissioner Wopke Hoekstra said. Some developing nations said they need the "headline number first". Some developing countries, including Latin American and African nations as well as island states, have also complained about the lack of mitigation ambition. Cop is facing one of the "weakest mitigation texts we have ever seen," Panama said. But they also indicated that financial support was missing to implement action. Developed countries at Cop 29 seek the implementation of the energy pledges made last year. "What we had on our agenda was not just to restate the [Cop 28] consensus but actually to enhance and to operationalise that," but the text goes in the opposite direction, Hoekstra said, talking about the latest draft on finance. Whether hints that Brazil has mitigation in focus for next year's summit will be enough to assuage concerns from developed countries at Cop 29 on fossil fuel ambitions remains to be seen. The communique of the G20, which the country hosted, does not explicitly mention the goal to transition away from fossil fuels either. The developed countries' mitigation stance grew firmer after talks on a work programme dedicated to mitigation, the obvious channel for fossil fuel language, was rescued from the brink of collapse last week. Discussions have stalled, but another text — the UAE dialogue which is meant to track progress on the outcomes of Cop 28 — still has options referring to fossil fuels. But in these negotiations too, divisions remain. "The UAE dialogue contains some positive optional language on deep, rapid and sustained emissions reductions and the [Cop 28] energy package, climate think-tank E3G said. But Saudi Arabia has made clear that this was unacceptable, while India, which worked to water down a coal deal at Cop 26, is pushing back on the 1.5°C temperature limit of the Paris Agreement. Negotiators are starting to run out of time. Draft after draft, the divide fails to be breached with no agreement on an amount for the finance deal. "We cannot talk about a lower or higher number because there is no number," noted Colombia's environment minister Susana Muhamad. The next iteration should have numbers based on the Cop 29 presidency's "view of possible landing zones". The fact that the draft text on finance has no bridging proposal is a concern, non-profit WRI director of international climate action David Waskow said. Finance was always meant to be the centrepiece of Cop 29. Parties have not formally discussed the goal in 15 years, and have been trying to prepare for a new deal through technical meetings for the past two years. But the discussion needs to end in Baku. By Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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