Newbuildings - a worrying trend

http://www.tankeroperator.com/ViewNews.aspx?NewsID=8763

There has been an increasing pace of newbuilding contracts in the tanker sector thus far this year. 

 

Figures produced by BIMCO’s chief markets analyst, Peter Sand, show that up to June, some 22 tankers have been ordered, totalling 2.6 mill dwt.

For June, the crude oil segment ordering consisted entirely of Suezmaxes. Around 0.7 mill dwt of products tankers were also contracted during the month.

Sand said; “BIMCO expected newbuild activity to pick up, so the recent development is not surprising. It is, however, not what the industry needs given the present challenges in the market, as earnings give little incentive for adding more capacity.

“The low level of contracting, as seen in 2016, is necessary in order to restore the fundamental balance between supply and demand in the shipping industry.

“As the crude oil and product tanker shipping sectors are all struggling with very low freight rates, it is important that the recent development in contracting activity reflects a short term trend. A continuous high level of newbuild activity will halt the current slow progressing improvement in the shipping markets,” he said.

In the first half of this year, more than 60% of the contracts signed for drybulk and the tanker sectors were for crude oil tankers. A total of 11.8 mill dwt of tankers were ordered with VLCCs grabbing the lion’s share with 27 vessels of 8.5 mill dwt.

The 27 VLCCs were ordered between January and May, which was the highest level seen in the first five months of a year since 2008. In addition, 2.2 mill dwt of Suezmaxes and 1.1 mill dwt of Aframaxes were contracted.

The net VLCC fleet growth reached 8.1% in February of this year, which was the highest since September, 2009. The number of VLCC deliveries in the first five months of 2017 was the highest since 2011, while only two VLCCs left the fleet during the same period.

This surge in deliveries has affected the supply side, as demolition activity was close to zero in 2015 and 2016, thereby causing the fleet to grow.    

Sand added: “BIMCO continuously stresses the need for managing the supply in the crude oil tanker industry. It is essential to handle the supply side as demand growth will not support the market to the same extent, as it did in 2016.

“If the situation doesn’t ease off, we might see the same fundamental imbalance for tankers, as seen in the drybulk shipping industry, which will take years to overcome,” he concluded. 

OPEC Resists Flow of History With Reluctance to Cut Deeper

• In the past, OPEC has often delivered supply cuts in stages
• U.S. shale makes group wary of deepening production curbs

The chorus in the oil market calling for deeper production cuts gets louder almost every day. By resisting the clamor, OPEC is breaking with its own history.

As crude sank below $50 a barrel -- less than half the price of two years ago -- market-watchers from Goldman Sachs Group Inc. to former OPEC officials said supply curbs imposed this year need to be intensified. That would be consistent with past behavior, when production cuts or increases often arrived in stages a few months apart. 

This time is different. The emergence of U.S. shale oil producers -- who can adjust supply more rapidly than OPEC’s previous rivals -- means the Organization of Petroleum Exporting Countries cannot act with the same freedom it once did. As economic pressure mounts for exporting countries, using the old playbook runs the risk that new American supplies would fill in any extra cutbacks.

“When OPEC was in control, it would often act in stages,” said Chakib Khelil, a former Algerian energy minister who was OPEC president in 2008. “The market is different than in 2008. Today, non-OPEC plays a larger role in supply. And the major issue is how long can they sustain this supply.”

Oil has given up almost all its gains since OPEC and Russia launched their initiative to clear a three-year surplus. Their supply cuts have failed to deplete the world’s bloated fuel stockpiles quickly enough and West Texas Intermediate futures have declined about 16 percent this year, trading at $45.06 a barrel at 10:04 a.m. in New York on Thursday. Previously, that would probably have prompted OPEC to revise its plans and agree on additional reductions.

“In the past if it didn’t work, OPEC would adjust lower,” said Mike Wittner, head of oil market research at Societe Generale SA in New York. “It’s a process. That’s what supply management means.”

The last time OPEC intervened, when the global recession took hold in 2008, it initially agreed a supply cut in October and, when prices continued to plunge, supplemented this with another reduction in December, the biggest in the group’s history.

Not Sacrosanct

Between 2004 and 2005, the organization increased output targets six times to satisfy booming consumption in China. And three cuts were made in quick succession from 1998 to 1999 as oil demand tumbled in the wake of the Asian financial crisis.

“One-and-done has certainly not been sacrosanct policy,” said Helima Croft, head of commodity strategy at RBC Capital Markets LLC.

While the organization didn’t always take a sequential approach, “when the situation required further action,” it wasn’t unusual for OPEC to take it, said Adnan Shihab-Eldin, director-general of the Kuwait Foundation for the Advancement of Sciences and former OPEC secretary-general.

With the world’s fuel inventories still brimming, the organization needs to revert to that old approach with a “deeper cut,” said Nordine Ait-Laoussine, president of Geneva-based consultants Nalcosa and former energy minister of Algeria.

Although the organization and its partners -- known as the Vienna Group -- agreed last month to prolong the cuts until next April, they’ve shown no interest yet in amplifying them. Saudi Arabian Energy Minister Khalid Al-Falih reiterated on June 19 that global markets are already on the path to re-balancing, while a committee of producers that met in Vienna the next day was said to have given additional cutbacks no serious consideration.

United Arab Emirates Energy Minister Suhail Mazrouei said in Paris on Thursday that there are “no plans or talks" to enlarge the cuts.

Shale Difference

The key difference from previous OPEC efforts is that U.S. shale producers can rebound quickly enough to undo their work, according to Bob McNally, president of consultants The Rapidan Group LLC. That concern had deterred OPEC from reducing output in this crisis until late last year.

“Sequential steps were seen during the big price busts of 1998 and 2008,” McNally said. “Arguably we are seeing a soft repeat of sequencing with the extension. The difference is that shale’s bounce back is helping to frustrate the Vienna Group’s attempts to normalize inventories and thereby remove the threat of a price collapse.”

U.S. crude producers, who unleashed the glut OPEC is now fighting to clear, have recovered almost all the output they lost during the market’s three-year rout, as the nation’s shale-oil drillers learn to live with lower prices. National output is projected to hit a record next year, according to the Energy Information Administration.

Old Habit

Still, the very resilience of shale supply could yet lure OPEC back to its old habit of making supplementary cuts, according to McNally and Wittner.

With inventories still swollen and prices in a rut, the organization may soon face two main options: accept that their efforts have failed and reverse the cutbacks, or take the gamble of deepening them. 

Cutting output any further would also mean betting on a big enough jump in prices to offset the loss of exports. While that happened in the first quarter, according to the International Energy Agency, the benefit has been fading, with Saudi Arabia’s foreign reserves dwindling this year by about $35 billion, or 6.7 percent.

Saudi Arabia’s Al-Falih has promised to do “whatever it takes” to re-balance the market. The kingdom -- architect of the current policy -- may be unwilling to endure the humiliation of a reversal, said Wittner.

That could see OPEC “double-down on their decision and cut significantly more,” he said. “But an additional cut brings its own dangers, which is a U.S. production recovery.”

Gas prices stun analysts: July 4 lower than Jan. 1

http://mailchi.mp/theneed2know/healthcare-halt-subway-debacle-serena-cover?e=a2dca4544e

Talk about fireworks.

For the first time its 17-year history, consumer data tool GasBuddy is projecting that gasoline prices will be lower on the Fourth of July than they were on New Year's Day.

The seasonal switcheroo is a result of crude oil's unexpected price decline in 2017 caused by a global glut of petroleum, which isn't going away anytime soon. 

For drivers, that translates into unforeseen savings just in time for the heart of the summer travel season. 

GasBuddy is projecting a nationwide average of $2.21 per gallon on July 4, which would be 12 cents lower than the price at the year's inception. That's also the lowest price on Independence Day since 2005.

It's "quite the dramatic turnaround" after previous projections that gasoline would near $3 per gallon this summer, GasBuddy petroleum analyst Patrick DeHaan said.

Americans save $4 million per day for every 1 cent drop, DeHaan said. "It really adds up."

At least one station in 35 states is already offering gas for less than $2 per gallon.

Gas is typically 47 cents more expensive on July 4 than on the previous Jan. 1, according to GasBuddy. The usual variation is largely due to lower demand in the wintertime.

"A fundamental principle of the way gas prices work is you never see gas prices lower on the largest, most popular summer driving holiday than you do on New Year's Day," DeHaan said. "For anybody who would have told you that's true, you'd probably think they belong in an asylu

Taking a road trip with your pet? Here are a few vital tips to ensure a good time for everyone. Buzz60

Prices have been diving for several weeks as global oil prices contract. Nationwide prices were averaging $2.26 on Tuesday afternoon, down 11.8 cents from a month earlier.

The U.S. energy industry has continued pumping oil and natural gas at a steady clip, keeping supplies high despite an effort by the Organization of the Petroleum Exporting Countries (OPEC) to boost prices through production cuts.

The price of West Texas Intermediate oil, the U.S. benchmark crude, has been trading in the $42 to $44 range over the last week. Less than a month ago, oil was trading above $50 and experts were projecting prices of $60 to $70 later this year. That now looks unlikely.

DeHaan said gas prices probably already peaked for the year, barring a major hurricane that disrupts U.S. refineries.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.

https://www.usatoday.com/story/money/cars/2017/06/27/july-4-gas-prices/428964001/?utm_source=Need+2+Know&utm_campaign=f603a66790-EMAIL_CAMPAIGN_2017_06_27&utm_medium=email&utm_term=0_97f672225d-f603a66790-306676285 

France plans onFrance plans one billion euros investment nigerias oil industry

Gauer stated that the fund was aimed at encouraging French investors to invest in the Nigeria Oil and Gas sector, especially in the light of the fact that Nigeria remains her first economic trading partner in Africa. He also stated that in spite of the concerns expressed by some French companies who were having challenges with the unclear Nigeria’s fiscal policies in the Oil and Gas sector, some other French investors were currently developing wind energy and solar energy in Katsina State. The French Ambassador commended the Federal Government for stemming the Niger Delta insecurity situation, noting that Total, a French multinational oil and gas company, had significant investment equity in the Nigeria Liquefied Natural Gas Limited (NLNG) and Egina project. He added that the French government is also cooperating with the Federal Government in the fight against Boko Haram insurgency. In his own remarks, Ughamadu, said the NNPC, under the current management led by the Group Managing Director, Mr. Maikanti Baru, was well positioned and open to investment opportunities from the French Government and investors. He noted that with the significant scale down in pipeline vandalism and insecurity which has boosted oil production, global investors such as the French Government can now invest in renewable energy, gas and power infrastructural development, pipeline construction, storage facility and the direct sales and direct purchase of Nigeria crude oil grades. He said the NNPC as the state owned oil and gas Corporation had global operations and called for closer collaboration between the French Government and the Corporation especially in the area of consular services in order to enable NNPC top executives and staff meet their global engagements. He thanked the Ambassador for the warm reception accorded the NNPC delegation and assured him that with the leadership of the new NNPC management, the corporation was determined to develop a robust business atmosphere for investors.

Read more at: http://www.vanguardngr.com/2017/06/france-plans-one-billion-euros-investment-nigerias-oil-industry/

Gauer stated that the fund was aimed at encouraging French investors to invest in the Nigeria Oil and Gas sector, especially in the light of the fact that Nigeria remains her first economic trading partner in Africa. He also stated that in spite of the concerns expressed by some French companies who were having challenges with the unclear Nigeria’s fiscal policies in the Oil and Gas sector, some other French investors were currently developing wind energy and solar energy in Katsina State. The French Ambassador commended the Federal Government for stemming the Niger Delta insecurity situation, noting that Total, a French multinational oil and gas company, had significant investment equity in the Nigeria Liquefied Natural Gas Limited (NLNG) and Egina project. He added that the French government is also cooperating with the Federal Government in the fight against Boko Haram insurgency. In his own remarks, Ughamadu, said the NNPC, under the current management led by the Group Managing Director, Mr. Maikanti Baru, was well positioned and open to investment opportunities from the French Government and investors. He noted that with the significant scale down in pipeline vandalism and insecurity which has boosted oil production, global investors such as the French Government can now invest in renewable energy, gas and power infrastructural development, pipeline construction, storage facility and the direct sales and direct purchase of Nigeria crude oil grades. He said the NNPC as the state owned oil and gas Corporation had global operations and called for closer collaboration between the French Government and the Corporation especially in the area of consular services in order to enable NNPC top executives and staff meet their global engagements. He thanked the Ambassador for the warm reception accorded the NNPC delegation and assured him that with the leadership of the new NNPC management, the corporation was determined to develop a robust business atmosphere for investors.

Read more at: http://www.vanguardngr.com/2017/06/france-plans-one-billion-euros-investment-nigerias-oil-industry/

Gauer stated that the fund was aimed at encouraging French investors to invest in the Nigeria Oil and Gas sector, especially in the light of the fact that Nigeria remains her first economic trading partner in Africa. He also stated that in spite of the concerns expressed by some French companies who were having challenges with the unclear Nigeria’s fiscal policies in the Oil and Gas sector, some other French investors were currently developing wind energy and solar energy in Katsina State. The French Ambassador commended the Federal Government for stemming the Niger Delta insecurity situation, noting that Total, a French multinational oil and gas company, had significant investment equity in the Nigeria Liquefied Natural Gas Limited (NLNG) and Egina project. He added that the French government is also cooperating with the Federal Government in the fight against Boko Haram insurgency. In his own remarks, Ughamadu, said the NNPC, under the current management led by the Group Managing Director, Mr. Maikanti Baru, was well positioned and open to investment opportunities from the French Government and investors. He noted that with the significant scale down in pipeline vandalism and insecurity which has boosted oil production, global investors such as the French Government can now invest in renewable energy, gas and power infrastructural development, pipeline construction, storage facility and the direct sales and direct purchase of Nigeria crude oil grades. He said the NNPC as the state owned oil and gas Corporation had global operations and called for closer collaboration between the French Government and the Corporation especially in the area of consular services in order to enable NNPC top executives and staff meet their global engagements. He thanked the Ambassador for the warm reception accorded the NNPC delegation and assured him that with the leadership of the new NNPC management, the corporation was determined to develop a robust business atmosphere for investors.

Read more at: http://www.vanguardngr.com/2017/06/france-plans-one-billion-euros-investment-nigerias-oil-industry

Lagos State Governor, Mr. Akinwunmi Ambode (right) presenting an eyo plaque to the Ambassador of France to Nigeria, Mr. Denys Gauer (left) during his courtesy visit to the Governor at the Lagos House, Ikeja, on Wednesday, July 15, 2015.

Read more at: http://www.vanguardngr.com/2017/06/france-plans-one-billion-euros-investment-nigerias-oil-industry/

Lagos State Governor, Mr. Akinwunmi Ambode (right) presenting an eyo plaque to the Ambassador of France to Nigeria, Mr. Denys Gauer (left) during his courtesy visit to the Governor at the Lagos House, Ikeja, on Wednesday, July 15, 2015.

Read more at: http://www.vanguardngr.com/2017/06/france-plans-one-billion-euros-investment-nigerias-oil-indust

http://www.vanguardngr.com/2017/06/france-plans-one-billion-euros-investment-nigerias-oil-industry/

The Nigerian National Petroleum Corporation, yesterday, stated that France, through the French Development Agency, has set aside one billion euros to be invested in the Nigerian Oil and Gas industry. 

According to a statement by the NNPC, France Ambassador to Nigeria, His Excellency, Denys Gauer, made this known when the Group General Manager, Group Public Affairs Division of the NNPC, Mr. Ndu Ughamadu, led a delegation to his office in Abuja.

The Nigerian National Petroleum Corporation, yesterday, stated that France, through the French Development Agency, has set aside one billion euros to be invested in the Nigerian Oil and Gas industry. According to a statement by the NNPC, France Ambassador to Nigeria, His Excellency, Denys Gauer, made this known when the Group General Manager, Group Public Affairs Division of the NNPC, Mr. Ndu Ughamadu, led a delegation to his office in Abuja.

Read more at: http://www.vanguardngr.com/2017/06/france-plans-one-billion-euros-investment-nigerias-oil-industry/

Gauer stated that the fund was aimed at encouraging French investors to invest in the Nigeria Oil and Gas sector, especially in the light of the fact that Nigeria remains her first economic trading partner in Africa. 

He also stated that in spite of the concerns expressed by some French companies who were having challenges with the unclear Nigeria’s fiscal policies in the Oil and Gas sector, some other French investors were currently developing wind energy and solar energy in Katsina State. 

The French Ambassador commended the Federal Government for stemming the Niger Delta insecurity situation, noting that Total, a French multinational oil and gas company, had significant investment equity in the Nigeria Liquefied Natural Gas Limited (NLNG) and Egina project. 

He added that the French government is also cooperating with the Federal Government in the fight against Boko Haram insurgency. 

In his own remarks, Ughamadu, said the NNPC, under the current management led by the Group Managing Director, Mr. Maikanti Baru, was well positioned and open to investment opportunities from the French Government and investors. 

He noted that with the significant scale down in pipeline vandalism and insecurity which has boosted oil production, global investors such as the French Government can now invest in renewable energy, gas and power infrastructural development, pipeline construction, storage facility and the direct sales and direct purchase of Nigeria crude oil grades. 

He said the NNPC as the state owned oil and gas Corporation had global operations and called for closer collaboration between the French Government and the Corporation especially in the area of consular services in order to enable NNPC top executives and staff meet their global engagements. 

He thanked the Ambassador for the warm reception accorded the NNPC delegation and assured him that with the leadership of the new NNPC management, the corporation was determined to develop a robust business atmosphere for investors.

Maersk says global IT breakdown caused by cyber attack

http://www.reuters.com/article/us-cyber-attack-maersk-idUSKBN19I1NO?il=0

Shipping giant A.P. Moller-Maersk, which handles one out of seven containers shipped globally, said a cyber attack had caused outages at its computer systems across the world on Tuesday.
The attack came as computer servers across Europe and in India were hit by a major ransomware attack.

"We can confirm that Maersk IT systems are down across multiple sites and business units due to a cyber attack," Maersk said on Twitter.

The breakdown affected all business units at Maersk, including container shipping, port and tug boat operations, oil and gas production, drilling services, and oil tankers, the company said.

The IT breakdown could extend across the company's global operations, a spokeswoman said, but could not say how Maersk's operations were impacted.

With a fleet of more than 600 container vessels, Maersk is the world's biggest shipping company with a market share of around 16 percent. The company handles around 25 percent of all containers shipped on the key Asia-Europe route.

Maersk's port operator APM Terminals was also hit, with Dutch broadcaster RTV Rijnmond reporting that 17 shipping container terminals run by APM Terminals had been hacked, including two in Rotterdam and 15 in other parts of the world.

The RTV report said computers were infected by ransomware that encrypted hard drives at APM Terminals.

The container shipping industry has lagged some other sectors in bringing more of its processes online.

However, in a digital push Maersk says it is committed to automating its systems to drive efficiency and cut costs, although there is still a huge amount of paperwork slowing down the handling and tracking of containers.

Russia's top oil producer Rosneft said on Tuesday its servers had been hit by a large-scale cyber attack, but its oil production was unaffected.

Ukraine's central bank also said a number of Ukrainian commercial banks and state and private companies had been hit by cyber attacks via an "unknown virus".

(Reporting by Jacob Gronholt-Pedersen; Editing by Jason Neely and Susan Fenton)

U.S. Diesel Imports to Europe Surge, Latin American Demand Clouds Total

European imports of U.S. diesel are on track to reach their highest monthly level this year so far during July, according to data from OPIS tanker tracking, although increasing demand from Latin America is making it difficult for traders to estimate how much will eventually arrive in the region.

As much as 1 million tons of U.S. diesel could discharge into Europe during the first 20 days of July, according to shipbrokers and OPIS tanker tracking. This is almost double what was tracked arriving in the region during the first 20 days of June.

However, the amount that will eventually head across the Atlantic is becoming increasingly difficult to estimate, with more than half of the tracked volumes expected to load on vessels which have options to discharge in several locations.

An ongoing outage at the 330,000-b/d Pemex Salina Cruz refinery in Mexico, along with strong demand from Latin American countries with troubled refining capacity such as Venezuela and Brazil, have attracted increasing volumes from the U.S. Gulf Coast over recent weeks.

Meanwhile, refiners in PADD3 have been ramping up their output as buoyant diesel margins, healthy domestic demand and open arbitrages pile on the incentives to increase throughput.

While the latest data from the EIA shows a narrow 200,000-bbl gain over 2016 distillate inventory levels in the week to June 16, domestic demand is up around 7.7% year on year, hovering above 4 million b/d, while exports have held a nine-consecutive-week streak of 1 million b/d.

The ability of Latin America to continue absorbing U.S. Gulf Coast diesel output seems unlikely, according to recent research by consultancy Energy Aspects, which is expected to put increasing pressure on European fundamentals as sellers look for alternative outlets.

"With Latin American economies struggling to grow amid political turmoil in many of the big economies, there is limited scope for further market share gains in the region by USGC refiners. This means surplus barrels must go elsewhere -- in all likelihood they will be forced over to Europe, especially while product timespreads do not offer interesting returns," the consultancy said in their market outlook for middle distillates.

While European diesel stocks are currently below last year's peak due to strong domestic demand and refinery turnarounds, healthy margins on both sides of the Atlantic combined with light maintenance schedules planned for the autumn could quickly upset the supply and demand balance as the market emerges from its peak seasonal demand.

"The key point here is that [maintenance] will have to increase by a significant amount or crude will need to tighten and squeeze margins at some point if Atlantic basin diesel timespreads are not to deteriorate rapidly in the autumn. Looking further ahead, Q4 17 looks very problematic if both U.S. refinery runs and European throughputs continue at their current level unchecked," Energy Aspects added.

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Shipping confidence hits three year high

http://www.tankeroperator.com/ViewNews.aspx?NewsID=8761

Shipping confidence recorded its equal highest rating for three years in the three months ending May, 2017.

 

The average confidence level expressed by respondents to the quarterly Moore Stephens survey was up to 6.1 out of 10 from the 5.6 recorded in the previous survey in February, 2017. 

 

Increased confidence was recorded by all main categories of respondent to the survey, which launched in May, 2008 with an overall confidence rating of 6.8.

 

A number of respondents expressed cautious optimism about the industry’s fortunes over the next 12 months, based largely on perceived increased levels of ship demolition and a rationalisation of over-ambitious newbuilding plans, which helped increase expectations of major investments being made over the period. Concern persisted, however, over political uncertainty, overtonnaging in certain trades, depressed oil prices and a potential dearth of quality seafarers.

 

One respondent said, “Shipping people are eternally optimistic, with one week of good news seeming to help them forget eight terrible years of hardship and financial loss.”

 

Half of the respondents expected finance costs to increase over the coming year, compared to 54% in the previous survey.“The financial support needed to boost the markets is not yet at expected levels,” noted one respondent, “but we believe that the situation will improve in the coming months as demand increases.”

 

Demand trends, cited by 26% of respondents, continued to be the factor expected to influence performance most significantly over the next 12 months, followed by competition (22%) and finance costs (14%). According to one respondent,“Larger companies are targeting their smaller competitors in order to minimise competition and secure a stronger position in the market.”

 

The number of respondents expecting higher rates over the next 12 months was up on the previous survey in all three main tonnage categories. In the tanker market, 32% of respondents anticipated improved rates, as opposed to 25% last time, while the number anticipating lower tanker rates fell from 28% to 16%. 

 

Richard Greiner, Partner, Shipping & Transport at Moore Stephens, said, “The survey launched in 2008, on the very cusp of one of the most protracted and severe global economic downturns, with a confidence rating of 6.8. In our latest survey, the figure stands at 6.1 which, given geopolitical, economic and industry developments, must be seen as a robust rating. Moreover, confidence today of making a major new investment is the highest it has been for almost three years. The positive sentiment on freight rates is welcome, although this must be weighed against the lows to which they have fallen and from which they must continue to recover.

 

“Even for an industry, which is familiar with the volatile nature of international commerce, shipping’s ability to survive adversity is worthy of comment. Our latest survey found many of our respondents in watchful mode, mindful of the fact that there are still too many ships, but encouraged to believe that increased demolition and more pragmatism by industry stakeholders will help to redress this imbalance. Respondents also remain cognisant of the impact which geopolitical developments can have on shipping, and it will be instructive to see what effect all this will have on industry confidence in our next quarterly survey,”he said.

Indonesian firm interested in building crude oil refinery in Nigeria -NNPC

https://www.reuters.com/article/nigeria-oil-idUSL8N1JI5J3

Indonesian engineering firm PT Intim Perkasa has expressed an interest in building a refinery in Nigeria, the West African country's state oil company said on Wednesday.

Nigeria has been seeking investment in the sector to reduce reliance on imported oil products that consume a large portion of the OPEC member's scarce foreign currency reserves.

Its existing, ageing refineries produce hardly any fuel after years of neglect.

A representative of PT Intim Perkasa Nigeria Ltd, a subsidiary of the Indonesian company, indicated an interest in building a modular refinery in the southern Akwa Ibom state, the Nigerian National Petroleum Corporation (NNPC) said in an emailed statement.

It would have a refining capacity of 10,000 barrels per day, said NNPC spokesman Ndu Ughamadu in the statement.

Nigeria currently has a refining capacity of 445,000 barrels per day (bpd).

"We have embarked on an ambitious plan to fast-track programmes to restore our capacity utilization from 30 per cent to a minimum of 90 per cent in the next 24 months," said Maikanti Baru, NNPC group managing director.

"To do that, we are working on securing financing from third parties, not just funding, but also technical expertise," he added.

PT Intim Perkasa could not immediately be reached for comment. (Reporting by Alexis Akwagyiram; Editing by Elaine Hardcastle)

Saudi king upends royal succession, names son as first heir

  

In this April 5, 2017 photo Saudi King Salman, right, and Defense Minister and Deputy Crown Prince Mohammed bin Salman wave as they leave the hall after talks with the British prime minister, in Riyadh, Saudi Arabia. (Saudi Press Agency via AP)

https://www.yahoo.com/news/saudi-king-upends-royal-succession-names-son-1st-035529307.html

Saudi Arabia's King Salman on Wednesday appointed his 31-year-old son Mohammed bin Salman as crown prince, placing him first-in-line to the throne and removing the country's counterterrorism czar and a figure well-known to Washington from the line of succession.

The monarch stripped Prince Mohammed bin Nayef from his title as crown prince and from his powerful position as the country's interior minister overseeing security. The announcements were made in a series of royal decrees carried on the state-run Saudi Press Agency.

The all-but-certain takeover of the throne by Mohammed bin Salman awards near absolute powers to a prince who has ruled out dialogue with rival Iran, has moved to isolate neighboring Qatar for its support of Islamist groups and who has led a war in Yemen that has killed thousands of civilians.

The prince already oversees a vast portfolio as defense minister and is spearheading economic reforms. He has become popular among some of Saudi Arabia's majority youth for pushing reforms that have opened the deeply conservative country to entertainment and greater foreign investments as part of an effort to overhaul the economy , including plans to list a percentage of the state-run oil giant Aramco.

The young prince was little known to Saudis and outsiders before Salman became king in January 2015. He had previously been in charge of his father's royal court when Salman was the crown prince.

The Saudi monarch quickly awarded his son expansive powers and named him deputy crown prince two years ago to the surprise of many within the royal family who are more senior and more experienced than Mohammed bin Salman, also known by his initials MBS.

The appointment of such a young royal as the immediate heir to the throne essentially sets Saudi policy for decades and removes the challenge of uncertainty. Saudi Arabia's stock market was up by more than 3.5 percent in mid-day trading.

"He could be there for 50 years," said Kristian Coates Ulrichsen, a research fellow at the James A. Baker III Institute for Public Policy at Rice University. "If you look at it positively, it is basically setting Saudi Arabia's course into the 21st century."

Another young prince also ascended to power on Wednesday. Prince Abdulaziz bin Saud, 33, was named the new interior minister tasked with counterterrorism efforts and domestic security. His father is the governor of Saudi Arabia's vast Eastern Province, home to much of the country's oil wealth and most of its minority Shiites. He previously served as an adviser to the interior and defense ministries.

The new interior minister is Mohammed bin Nayef's nephew, while Mohammed bin Salman is the former crown prince's cousin. All hail from the powerful Sudairi branch of the royal family.

The royal decree issued Wednesday stated that "a majority" of senior royal members — 31 out of 34 — from the so-called Allegiance Council support the recasting of the line of succession.

The Allegiance Council is a body made up of the sons and prominent grandsons of the late King Abdul-Aziz, the founder of the Saudi state. They gather in secret and vote to pick the king and crown prince from among themselves. It was not immediately clear if the council met before Wednesday's sudden change.

Even when there is disagreement, the royal family has long followed a tradition of speaking with one voice, particularly on issues of succession, in order to appear united in front of Saudi Arabia's many tribes and communities.

After the decrees were announced, Saudi TV aired footage of the new crown prince kissing Mohammed bin Nayef's hand and kneeling before him. Mohammed bin Nayef is heard telling him: "I will rest now, and God help you."

In celebration of the news, King Salman ordered the reinstatement of all benefits and allowances for government employees that had been curbed by austerity measures, and granted additional days off for the upcoming Eid holiday that marks the end of Ramadan.

Over the weekend, the king had issued a decree restructuring Saudi Arabia's system for prosecutions that removed Mohammed bin Nayef's oversight of criminal investigations, and instead ordered that a newly-named Office of Public Prosecution report directly to the monarch.

Mohammed bin Nayef was once a towering figure credited with crushing al-Qaida's cells in Saudi Arabia. He worked closely with Washington after the Sept. 11 attacks, helping to share intelligence to thwart more attacks. The prince had previously studied at the FBI and at Scotland Yard's anti-terrorism institute.

Dubbed by Washington insiders as "the prince of counterterrorism", Mohammed bin Nayef developed a ground-breaking program that rehabilitates and counsels individuals convicted of terrorism-related crimes. The center bears his name. In 2009, he survived an assassination attempt when a man who'd completed the program approached the prince and blew himself up.

The 58-year-old prince had served in a senior security post before taking over as interior minister from his father, the late Prince Nayef, in 2011. Both cracked down hard on rights activists and crushed any signs of dissent.

Though his image remained on billboards and atop buildings throughout Saudi Arabia, Mohammed bin Nayef appeared to be slipping in profile and was not believed to have played a significant role in Saudi and Emirati-led efforts to isolate Qatar for its support of Islamist groups and its ties with Iran.

Instead, it was Mohammed bin Salman, who embarked on major overseas visits, including a trip to the White House to meet President Donald Trump in March. That visit to Washington helped lay the foundation for Trump's visit to Saudi Arabia in May, which marked the president's first overseas visit and which was promoted heavily by the kingdom as proof of its weight in the region and wider Muslim world.

Saudi-U.S. relations had cooled under the Obama administration after Washington pursued a nuclear accord with Shiite-majority Iran that the Sunni-ruled kingdom strongly opposed.

The warm ties forged between Riyadh and Washington under the Trump administration may have helped accelerate Mohammed bin Salman's ascension as crown prince.

Despite his ambitions, the prince has faced criticism for the Saudi-led war in Yemen, which he oversees as defense minister.

The war, launched more than two years ago, has failed to dislodge Iranian-allied rebels known as Houthis from the Yemeni capital, Sanaa, and has had devastating effects on the impoverished country. Rights groups say Saudi forces have killed scores of civilians and have called on the United States, as well as Britain and France, to halt the sale of weapons to Saudi Arabia that could be used in the war.

The U.S. already is helping the Saudis with intelligence and logistical support for the bombing campaign in Yemen, and the Trump administration has signaled it could assist with greater intelligence support to counter Iranian influence there.

The newly-minted crown prince also raised eyebrows when he ruled out any chance of dialogue with Iran. In remarks aired on Saudi TV in May, Mohammed bin Salman framed the tensions with Iran in sectarian terms, saying it is Iran's goal "to control the Islamic world" and to spread its Shiite doctrine. He also vowed to take "the battle" to Iran.

Iran and Saudi Arabia's rivalry has played out in proxy wars across the region. The conflicts have deepened Sunni-Shiite enmity between hard-liners on both sides.

Batrawy reported from Dubai, United Arab Emirates. Associated Press writers Jon Gambrell and Fay Abuelgasim in Dubai contributed to this report.

Follow Aya Batrawy on Twitter at https://twitter.com/ayaelb

Genscape Vesseltracker™ Continues AIS Antenna Network Expansion in U.S. Gulf of Mexico & Asia

http://www.genscape.com/blog/genscape-vesseltracker%E2%84%A2-continues-ais-antenna-network-expansion-us-gulf-mexico-asia

In recent months, Genscape Vesseltracker has continued expanding its AIS antenna network in key locations in the Gulf of Mexico (the Galveston Offshore Lightering Area) and Asia (Taiwan and the Philippines). The near-real-time vessel information in the new AIS antenna coverage region opens up a wealth of possibilities for traders, terminal operators, ferry operators, and other maritime professionals that go far beyond AIS’ original goal of simply helping avoid ship collisions.

Here are some examples showing what is possible in the new coverage areas:

U.S. Gulf of Mexico

Genscape Vesseltracker now has full AIS antenna coverage of the Galveston Offshore Lightering Area (GOLA). Located approximately 40-70 nautical miles (75-130 kilometers) southeast of Galveston, TX, it is a key area for lightering (i.e. transferring oil cargo between larger, ocean-going vessels and smaller, coastal vessels) and bunkering along the U.S. Gulf Coast.

Genscape Vesseltracker’s Cockpit tool view of the Galveston Offshore Lightering Area highlighted in the red box. Click to enlarge

The new AIS antenna coverage gives traders and analysts incredibly granular, near-real-time detail as they investigate commodity transfers in the GOLA. This AIS data also helps power Genscape’s BunkerPeriscope, which uses AIS and other data sources to provide an unprecedented view into local bunkering activities.

Taiwan

As part of a country-wide expansion in Taiwan, Genscape Vesseltracker has installed new antennas in the ports of Mailiao, Taichung, Bali, Tamsui, Su’ao, and Hualien, which are supplemented by existing antenna coverage in Kaohsiung, Tainan, and Keelung. AIS antennas are particularly important in this region, because AIS satellites often miss data as they cannot process all of the information they receive from the busy shipping lanes of the South China Sea.

Genscape Vesseltracker's antenna locations across Taiwan. Click to enlarge

As one of the original “Asian Tiger” economies, Taiwan is a major exporter of electronics, machinery, and petrochemicals, with extensive seaports in Keelung, Taipei, Taichung, and Kaohsiung, the country’s largest container port. AIS antenna coverage of Kaohsiung allows terminal operators and shipping lines to see up-to-the minute vessel arrivals and departures, and even set up automated notification systems to shave valuable minutes off of berth times.

Genscape Vesseltracker’s Cockpit tool allows users to receive more information on the vessels that are currently in the Port of Koahsiung. Click to enlarge

 

Philippines

Due south of Taiwan lies the Philippines, where Genscape Vesseltracker is also in the middle of a major AIS antenna network expansion. While there has been long-term coverage of major ports such as Manila, Subic Bay and Cebu, in recent months we have added new coverage in the following ports:

• Luzon Island: Batangas and Legazpi
• Mindoro: Calapan
• Panay Island: Caticlan and Iloilo
• Negros Occidental: Bacolod and San Carlos
• Central Visayas: Cebu and Tagbilaran

The new AIS antenna coverage is especially useful for the ferry industry, which is crucial for transport throughout the island country. In the past, ferries in the Philippines were plagued by fatal accidents caused by a combination of overloading or improper weight distribution, and sudden, severe storms. This resulted in several high-profile capsizing incidents where hundreds of ferry passengers lost their lives.

However, the Filipino ferry industry is now fighting back, using a mixed toolkit of better crew training, improved procedural awareness, and new technology such as AIS. Using Vesseltracker’s Cockpit View, for example, operations teams can understand how other vessels are reacting to certain weather conditions and decide to cancel a trip or turn back if they judge the situation to be too dangerous, and search-and-rescue (SAR) teams and nearby vessels can assist vessels in distress.

Genscape Vesseltracker’s Cockpit tool shows how between Bantangas and Calapan, a highly saturated ferry area, the ferry “Starlite Archer” is following “Fast Cat M1” and ferry “MV Maria Natasha” is following “FastCat M5.” Click to enlarge

If you are interested in becoming our Antenna Partner, please let us know. Genscape Vesseltracker’s Antenna Partners receive full access to all AIS antenna data and information from our ship database, including vessel owners and managers, and technical specifications. We are always working to expand our network, so if you are interested in becoming a Genscape Vesseltracker antenna partner, please contact us! 

PDVSA Leaves Bahamas Oil Terminal, Expands in St Eustatius

Venezuelan state-run oil company PDVSA is moving millions of barrels of oil from a Bahamas storage facility after terminating a contract with the owner, U.S. Buckeye Partners LP, according to internal data and sources close to the decision.

Buckeye and PDVSA had tried to resolve payment delays and other frequent problems that stalled some shipments, the sources said. But PDVSA decided to shift its oil to the Statia terminal, operated by U.S. NuStar Energy LP, in the neighboring island of St. Eustatius.

The termination is another sign of how PDVSA's deteriorating finances have strained its relationship with business partners. The state-owned company has struggled to maintain its tanker fleet on the water and to keep operations running to maximize income for the country's most important export: oil.

PDVSA's contract with Buckeye had included storage for up to 6 million barrels of crude and fuel oil. The contract was due to expire in December, but PDVSA decided to end the lease in advance and seek some $10 million in overpayments, according to a source from the Venezuelan company.

Buckeye and PDVSA did not respond to requests for comment. NuStar said it would not discuss customer activities at its terminals.

Since 2016 Buckeye had intermittently suspended PDVSA from moving its stored oil out of the terminal - the Caribbean's largest - over monthly payment delays, according to sources from the companies and Thomson Reuters Trade Flows data.

In late August, PDVSA renewed a 2014 contract with NuStar to secure its presence in Statia for three more years starting in March. The state-run company is now paying some $2.3 million per month to lease 5 million barrels of crude storage excluding extra charges, according to a document seen by Reuters.

PDVSA's supply and trade department last year also approved an option to lease a single buoy mooring in St. Eustatius and extra storage capacity for up to 4.3 million barrels of refined products.

"We are now consolidating blending and storage operations in St. Eustatius," the PDVSA source said.

NuStar's Statia terminal has capacity to store up to 13.03 million barrels of crude and products. It also has six mooring locations, blending and transshipment facilities.

In 2011, PDVSA announced a plan to increase storage capacity nearly fourfold in three years to handle new production of blends made from the Orinoco Belt's crudes. Since then, it has rented facilities in the Caribbean, but payment problems have recently affected its operations in several islands.

PDVSA operates the 335,000-barrel-per-day Isla refinery in Curacao and an adjacent terminal. It also owns the BOPEC storage terminal in Bonaire, leases the Aruba refinery and its terminal through its subsidiary Citgo, and has stakes in refineries in the Dominican Republic, Jamaica and Cuba.

Buckeye's Bahamas terminal was owned by PDVSA until 2008, when it was sold to investment firm First Reserve Corp. In 2010, Buckeye bought 80 percent of the facility, which can store up to 26.2 million barrels of oil.

Buckeye also owns terminals in St. Lucia and Puerto Rico.

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Qatar Sanctions to Prove Immaterial to LNG Markets

http://www.genscape.com/blog/qatar-sanctions-prove-immaterial-lng-markets 

In the short run, Saudi, Emirati, and Egyptian sanctions are posing an inconvenience for the global liquefied natural gas (LNG) trade. Qatar the world’s largest LNG exporter, has tried to remain neutral in the clash between Saudi Arabia and Iran over Persian Gulf dominance. However the Saudis, along with U.S. pressure, are now forcing Qatar to pick sides.

The escalating diplomatic conflict between Saudi Arabia and Qatar have resulted in a number of issues, including bunker fuel access to ships inbound from Asia and a potential closure of the Suez Canal for Qatari ships (unlikely due to international treaty). Qatar has recently diverted two European-bound ships from Suez transit to round the African Cape, a policy that is likely to continue until current friction is resolved.

Shell’s LNG supply to the Dubai Supply Authority (DUSUP) is sourced from Qatar. Due to the ban, Shell’s “Maran Gas Amphipolis” from Cheniere Energy’s Sabine Pass, which was initially headed towards the Port of Mina Al-Ahmadi in Kuwait, had to be redirected to the Port of Jebel Ali in Dubai. 

Source: Genscape Vesseltracker™. Redirect of Sabine cargo “Amphipolis” from Kuwait to UAE. Click to enlarge

 

The UAE and Qatar Will Not End Pipeline Deliveries

The Dolphin natural gas pipeline connects the UAE and Qatar, delivering 2 Bcf/d. The pipeline delivers Qatari natural gas to the UAE and Oman. Oman has remained neutral in this conflict.

With recent tensions, Genscape believes that the UAE will not be able to replace this volume through LNG while the Persian Gulf is in the middle of air conditioning season. It is also unlikely Qatar will want to sever this relationship; it’s necessary in order to maintain reliability as a supplier and to prevent an abrupt shut off, which could tax their reservoir. 

Source: Mubadala Petroleum. The UAE connects directly to Qatar via the Dolphin natural gas Pipeline. Click to enlarge

 

Egypt’s Gas Goal: Self Sufficient End of 2018

Egypt has vastly expanded its gas reserves over the last several years and hopes to speed up its production. EGAS is looking to defer dozens of cargoes that are due for arrival as production begins at Egypt's Zohr gas field in the Mediterranean. Trading companies holding the tenders will redirect Qatari supply to other markets.

Long-Term U.S. Gains from Qatari Fall Out

Qatari reliability concerns may encourage LNG buyers to look to American supply. Japan and Qatar are currently in negotiations for expiring contracts in 2022 and 2023, but should Japanese buyers decide to leave, they risk losing lucrative equity positions in Qatari projects. However, Japan, like Korea, has a security pact and trade issues with the U.S. that will weigh on these future commitments. Qatar’s market share in Japan is already under pressure from Australian and U.S. supplies, as well as future Russian sources. Losing share in Japan will force Qatar to seek sales among less creditworthy buyers in Africa and South Asia.

Qatar is not alone facing reliability issues. Saudi Arabia’s launch of its trillion dollar IPO may suffer collateral damage if the dispute does not wind down.

Genscape's Global North American LNG Supply and Demand Service can prepare traders, analysts, and other market players for changes in the rising global LNG industry. Genscape provides a comprehensive picture of the costs associated with purchasing gas for export, which can be critical in this competitive landscape. To learn more about Genscape’s Global North American LNG Supply and Demand Service, please click here.

With Genscape's Vesseltracker, users are able to track near-real-time changes to tanker movements. Genscape Vesseltracker's terrestrial and satellite-based AIS tracking capability provides current and historical visibility include vessel location and predictive analytics for every LNG vessel journey globally. Users actively monitoring the long-term track of the Rioja Knutsen (or another LNG tanker) are able to see shifts in destination, ETA, and instances of idling (floating storage), leveraging that information in their trading decisions To learn more about Genscape Vesseltracker, or to request a trial, please click here.

Nigeria regains position as Africa’s largest oil exporter

 

http://www.premiumtimesng.com/business/business-news/234171-nigeria-regains-position-africas-largest-oil-exporter.html

Nigeria’s crude oil exports are set to reach 1.84 million barrels per day (bpd) in July, PREMIUM TIMES has gathered.

The new figure is slightly higher because of a recovery in Forcados exports, according to the nation’s loading programmes seen Wednesday.

Forcados exports resumed at the end of May after a nearly complete shutdown since February 2016.

Meanwhile, the grade’s operator, Shell’s local subsidiary SPDC, issued an initial June schedule of 197,000 bpd.

It, however, increased the schedule to 252,000 bpd.

By the resumption, Nigeria returns to the status of Africa’s largest oil exporter, a title it lost to Angola in 2016.

The loss followed militant attacks on the nation’s oil infrastructure in the oil-rich Niger Delta region.

Production has since improved, following peaceful negotiations with leaders from the region.

Angola’s July exports are expected to be 1.55 million bpd, Reuters reports.

With a force majeure in place on Bonny Light, and loading delays of as much as 10 days, Nigeria’s export plans for June and July are likely to change.

China's May crude oil imports soar on increased buying by state-owned refiners

 

https://www.platts.com/events/emea/european-refining-summit/index?utm_campaign=17DGCFEMCF_PD777_European%20Refining%20Summit_EM4_C1&utm_medium=email&utm_source=Eloqua

Buying by state-owned refiners pushed up China's crude oil imports in May 15.4% year on year to 37.2 million mt, or 8.8 million b/d.

But analysts said they expected crude inflows to ease in June due to high stocks.

Imports in May rose 4.7% month on month, recent preliminary data released by the General Administration of Customs showed.

The imports are the second highest level ever after 9.21 million b/d imported in March this year.

“The increase was mainly from state-owned refiners as crude arrivals for independent refiners declined from April,” said Hou Rui, an analyst with S&P Global Platts' China Oil Analytics.

Independent refineries in China's eastern Shandong and Hebei provinces imported 8.43 million mt, or 1.99 million b/d, of crude oil in May, down 3% from April despite a 46% year-on-year increase, Platts data showed.

He added that most of the cargoes for the state-owned refiners were booked in March when oil prices were low.

"Refinery outages remained high in May, so the incremental barrels are likely to flow into storage for use in June," Hou said.

China's oil product exports in May increased 5.5% year on year to 4.03 million mt following additional export quota issued in mid-May. Exports were up 15.1% from April.

The latest state of play for Chinese refining and tea pot refineries in particular will be debated at length, along with many other key regional markets, at Platts European Refining Summit in Brussels this September.

Eni to Begin Oil Production from Sankofa Ahead of Schedule

Italy-based Eni SpA E announced that it will commence commercial oil and gas production at its Sankofa field off the coast of Ghana in July, three months prior to schedule.

The Sankofa field is expected to yield 45,000 barrels per day. This is phase one of the $7.9 billion Offshore Cape Three Points (OCTP) project that will produce about 180 million standard cubic feet of gas on a daily basis from the Gye Nyame reserve by the end of 2018.

OCTP is expected to more than double the domestic gas supply and accelerate economic growth in a country that also produces gold and cocoa.

Per sources, the gas is driving the production vessel and the surplus will be reinjected as output rises after commissioning. Eni has a stake of 44.44% in OCTP, signifying the largest foreign direct investment in Ghana's history. Other stake holders include upstream trader Vitol which currently holds an interest of 35.56% while state oil company, Ghana National Petroleum Corporation, has a combined, carried and participating interest of 20%.

The project is expected to boost Ghana's oil output to about 200,000 barrels per day and gas yield to over 300 million standard cubic feet.

Despite dearth of funds to buy oil in the absence of domestic gas to fuel thermal plants, Ghana soon expects to recover from such crisis. The government projects that gas from OCTP will augment generation by 1,000 megawatts, adequate to ensure stable supply.

The West African country began producing oil in 2010 from its flagship offshore Jubilee field, followed by production from the Tweneboa, Enyenra, Ntomme (TEN) field in August 2016. Both fields are operated by UK firm Tullow Oil.

Shares of the company have lost 1.3% in the last six months, while the Oil & Gas - International Integrated industry registered a decrease of 6%.

Read more: http://www.nasdaq.com/article/eni-to-begin-oil-production-from-sankofa-ahead-of-schedule-cm802059#ixzz4jtvltZCc

SemGroup Announces Agreement to Acquire Houston Fuel Oil Terminal Company

 

 Houston Fuel Oil Terminal Company / Houst Ship Channel

SemGroup Corporation announced that it has executed a definitive agreement to acquire Houston Fuel Oil Terminal Company (“HFOTCO”), one of the largest oil terminals in the U.S., from investment funds managed by Alinda Capital Partners. This acquisition establishes SemGroup’s position in the premier energy market, the Houston Ship Channel.

The 16.8-million-barrel terminal is strategically located on the U.S. Gulf Coast with pipeline connectivity to the local refining complex, deep water marine access and inbound pipeline, rail and truck receipt capabilities from all major producing basins. The assets are located on 330 acres on the Houston Ship Channel, one of the most active trading centers for residual fuel oil and crude oil in the world. The business is fully supported by take-or-pay contracts with primarily investment-grade counterparties that have been customers for an average of 15 years. HFOTCO is currently executing on contractually supported growth projects, including a new ship dock, a new pipeline and connections, as well as an additional 1.45 million barrels of crude oil storage, expected to be in service mid-2018. 

“This is a transformational acquisition that adds tremendous stability to our business and provides a dynamic platform for growth,” said SemGroup President and CEO Carlin Conner. “Consistent with our strategy to diversify our portfolio and become more refinery facing, HFOTCO brings a well-established base of high-quality, long-tenured customers. At the same time, the terminal’s premier location on the Houston Ship Channel provides deep water access and is well positioned to capture increasing export volumes. With the addition of HFOTCO, SemGroup will be uniquely positioned to capture the future trends in exporting crude oil and refined products resulting from the near and long-term anticipated growth in U.S. shale production.”

The total purchase consideration to acquire HFOTCO will consist of two payments. The first payment will be $1.5 billion at closing, including the assumption of an estimated $785 million of existing HFOTCO debt, and issuance of between $300 million to $400 million in common shares, at SemGroup’s election, to Alinda at $32.30 per share. The remainder of the initial payment will be funded in cash from SemGroup’s revolving credit facility. The second payment will consist of an additional $600 million which will be paid in cash before the end of 2018, which aligns consideration with EBITDA growth. SemGroup will have no obligation to make the second payment, which instead will be an obligation of its acquisition subsidiaries and secured by a pledge of the equity interests in such subsidiaries. The purchase price will be subject to customary adjustments.

Chris Beale, Managing Partner of Alinda Capital Partners, commented: “The HFOTCO management team has done an excellent job of growing and diversifying a world-class terminal business. We believe that adding this asset to SemGroup’s portfolio is a great way to leverage customer relationships, strengthen both businesses and create additional shareholder value.”

The acquisition is expected to close in the third quarter of 2017, subject to the receipt of certain governmental approvals and the satisfaction of other customary closing conditions.

SemGroup intends to maintain HFOTCO’s workforce and anticipates that the company’s approximately 125 employees will become members of the SemGroup family upon the transaction’s close.

“A large part of HFOTCO’s success has been its outstanding team,” Conner said. “We’re looking forward to these talented employees becoming part of the SemGroup team.”

Senior management at both SemGroup and HFOTCO have several decades of combined experience managing terminalling and logistics assets in the U.S. and abroad. SemGroup currently operates 7.6 million barrels of crude oil storage in Cushing and another 8.7 million barrels of multi-product storage in Milford Haven, U.K. Prior to SemGroup, CEO Carlin Conner spent more than 20 years in the terminal industry, most recently as managing director of Oiltanking GmbH, an independent worldwide storage provider based in Germany.

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