US crude oil exports increased by 582,000 b/d last week to 2.331 million
b/d, an all-time high, Energy Information Administration Administration
data showed Wednesday.
The push to ship more crude abroad
follows the ICE Brent/WTI spread widening from around $3/b in early
March to more than $6/b this week. The previous record-high was set the
week ending March 30 at 2.175 million b/d.
Despite higher
exports, imports also increased and refinery utilization fell leading to
a surprise build in crude stocks of 2.17 million barrels the week
ending April 20, according to EIA data.
Crude futures weakened
following the release of the weekly EIA data. At 1456 GMT, NYMEX June
crude was 5 cents lower at $67.65/b. ICE June Brent was 31 cents lower
at $73.55/b.
Before the release, NYMEX crude was 11 cents higher at $67.81/b, while ICE Brent was 10 cents lower at $73.76/b.
Crude
imports increased 720,000 b/d last week to 8.469 million b/d, while
refinery utilization declined 1.6 percentage points to 90.8% of
capacity.
US distillate stocks decreased 2.611 million barrels to
122.729 million barrels. For the same period, stocks increased by
316,000 barrels on average between 2013 and 2017.
NYMEX May ULSD was down 20 points at $2.1256/gal. Ahead of the EIA data, NYMEX May ULSD was 5 points higher at $2.1281/gal.
US
gasoline stocks increased 840,00 barrels to 236.807 million barrels,
compared with an average build of almost 500,000 barrels from 2013-17.
At
1456 GMT, NYMEX May RBOB was 1.55 cents lower at $2.0794/gal. Before
the release of the EIA data, NYMEX May RBOB was down 44 points at
$2.0905/gal.
Analysts surveyed Monday by S&P Global Platts
were looking for a decline in crude stocks of 1.1 million barrels.
Refinery utilization was expected to have decreased by 0.2 percentage
point.
Distillate stocks were expected to have been unchanged
last week, while analysts were looking for a 500,000-barrel draw in
gasoline stocks.
The American Petroleum Institute data released
Tuesday evening showed a build in crude stocks of 1.099 million barrels
for the week ended April 20.
Gasoline and distillate stocks fell 2.724 million barrels and 1.911 million barrels, respectively, the API data also showed.
President Donald Trump is hosting Nigerian President Muhammadu Buhari at the White House Monday.
The event will mark Trump's first official visit from an African head of state.
Last
April, the Trump administration tied up a $600 million deal with
Nigeria over the sale of military aircraft intended to be used in the
fight against Islamic extremist group Boko Haram.
President Donald Trump is hosting Nigerian President Muhammadu Buhari at the White House Monday in what will be his first official visit from an African head of state.
The "struggle against Islamic terrorism
in the Sahel," an area to the far north of Nigeria, as well as a "White
House attempt to make nice to Africa after a series of false steps,"
could be part of the agenda, John Campbell, U.S. ambassador to Nigeria
from 2004 to 2007 and now a senior fellow at the Council on Foreign
Relations, told CNBC last week. Campbell emphasized that his suggestions
were just "speculation" and that he has no connection with the present
U.S. administration.
In January of this year
Trump is alleged to have referred to African nations as "s---hole
countries," which the White House later did not deny.
Pius Utomi Ekpei | AFP | Getty Images
Aisha Oyebode, a founder of the Bring Back
Our Girls movement, speaks in Lagos, Nigeria, on April 13, 2018, ahead
of the fourth anniversary of the kidnapping of over 200 schoolgirls.
The invite to Buhari was issued earlier this month,
with the intention for both leaders to discuss promoting economic
growth, fighting terrorism and "building on Nigeria's role as a
democratic leader in the region," a White House communique said.
Nigeria has seen its
economy hammered in recent years by the volatile oil price, plunging
into its first annual recession in 25 years in 2016. Gross domestic
product growth for 2018 is forecast to be 2.1 percent by the International Monetary Fund.
Nonetheless, Nigeria
competes with South Africa for the title of the largest economy in
sub-Saharan Africa and is the continent's most populous nation, with 200
million inhabitants.
Last April, the Trump
administration tied up a $600 million deal with Nigeria over the sale of
military aircraft intended to be used in the fight against Islamic
extremist group Boko Haram. The deal dates back to former President Barack Obama's tenure, but was delayed over human rights concerns.
Nigerian presidency press office | Anadolu Agency | Getty Images
Then U.S. Secretary of State Rex Tillerson (L) and Nigerian President Muhammadu Buhari in Abuja, Nigeria, on March 12, 2018.
Nigeria imports most from China, whose share of total imports accounts for more than double that of the U.S., according to the World Bank.
Buhari's last foreign visit was to London for the Commonwealth Heads of Government Meeting last week, at which he said he'd met with Shell for talks to help secure a potential $15 billion investment in his country.
Buhari, 75, is a former
military leader. He was elected president in 2015 in what signified the
first time an opposition party had won an election in Nigeria. Earlier
this month it was announced that Buhari would contest the presidency
once again when Nigeria heads to the polls next year.
"For Buhari it is
advantageous to be seen to be active at the highest world stage while
his campaign for re-election in 2019 builds steam," Philip Walker,
Nigeria analyst at the Economist Intelligence Unit, told CNBC.
Exxon(XOM)
delivered a fresh reminder of its difficult position on Friday,
reporting oil and natural gas production fell by 6% during the first
quarter. That's despite the recent surge in crude oil prices.
It's part of an alarming trend: Exxon's output is down seven of the past eight quarters.
"They are trying to catch up, but they're late to the party," said Brian Youngberg, senior energy analyst at Edward Jones.
Chevron(CVX),
Exxon's smaller US rival, has been able to move much more quickly to
capitalize on the shale boom and higher prices. Chevron's global
production jumped 6% last quarter, helping to fuel a 33% profit increase
that exceeded expectations.
Exxon is struggling to keep up -- and Wall Street is losing patience.
The oil giant said shale production increased by a more modest 18% at
its Permian and Bakken projects.
Even though the US is on track
to pump a record amount of oil in 2018, Exxon's domestic oil production
inched up just 2% during the first quarter. Overall oil output failed
to grow for the seventh quarter of the past eight. Exxon pumps less oil
than it did a decade ago.
"Production was on the low side.
That's obviously not a good thing. There is no escaping that," said
Pavel Molchanov, an energy analyst at Raymond James.
Exxon's stock fell 3% on Friday, leaving it down 4% over the past year. Chevron is up 20% over that span, while ConocoPhillips(COP) has soared 38%.
Darren Woods, Exxon's CEO, attempted to reassure investors by saying
that the company is positioned "well for future growth" thanks to new
discoveries and acquisitions. Exxon also noted that it ramped up capital
spending by 17%.
One bright spot: Exxon generated the highest
amount of cash flow from operations and asset sales since 2014. That's
despite Exxon being hurt by an earthquake in Papua New Guinea that
halted production.
Yet Exxon is still recovering from missteps
during the leadership of former CEO Rex Tillerson, who left Exxon last
year to become US Secretary of State. Under Tillerson, Exxon was slow to
recognize the game-changing potential of shale oil. Huge technology
advances unlocked vast amounts of oil that had been trapped beneath the
earth.
"They viewed shale as not important," said Youngberg.
Instead of plowing money into what became lucrative shale plays in
Texas and North Dakota, Exxon stuck to the Big Oil script by investing
heavily in expensive projects, including ones in Russia, Alaska and the
Gulf of Mexico.
Shortly after Tillerson left the company, Exxon made a shale splash in
January 2017 by acquiring assets in the Permian Basin for $5.6 billion.
The fastest growing
shale field in the United States. It was also Exxon's biggest purchase
since buying natural gas producer XTO Energy for $41 billion in 2010,
just before natural gas prices crashed.
"That was one of the
worst acquisitions in the history of the energy business. It was
exquisitely poorly timed," said Molchanov. "Rex Tillerson deserves much
of the blame for it. It was essentially $40 billion down the drain."
Rather than invest in shale, prior to 2015 Exxon spent heavily on share
buybacks that were ill-timed. Exxon's stock price has since declinedand the company halted buybacks during the oil-price crash three years ago.
"They used to buy a ridiculous amount of shares -- at the wrong time," Youngberg said.
Exxon upset Wall Street on Friday by saying it won't restart its
buyback program just yet. Exxon did boost its dividend more than
expected though.
Given the ground Exxon has to catch-up to its rivals, Youngberg said holding off on buybacks probably makes sense.
"It reflects their strategy of attempting to jump-start growth," said Youngberg.
Right now, the national average per gallon is about $2.76, compared with $2.40 a year ago.
The amount is the highest it's been since summer 2015, when the average peaked at $2.81.
There are ways to save on gas, including shopping around and planning ahead.
With oil prices climbing and demand high, drivers are paying more to fill their gas tanks than they have in three years.
The national average for a gallon of
gas has climbed to $2.76, marking the highest it's been since summer
2015 when the cost peaked at $2.81, according to online gas station
database GasBuddy.com's latest weekly survey of 135,000 gas stations
across the country.
Californians are paying
the most: $3.56 per gallon. By contrast, motorists are paying about
$2.44, the lowest state average, in Missouri.
Getty Images
A customer pumps gasoline into his car at a service station in San Francisco.
Prices are expected to continue climbing into the summer months.
"While it won't cost
motorists as much as it did during 2011-2014, it will cost them millions
more every day versus last year," said Patrick DeHaan, senior petroleum
analyst for GasBuddy.com.
During that four-year span, the average per-gallon price remained between $3 and $4.
While the cost typically
heads higher every spring due to increased driving demand, the current
average is 15 percent more than the $2.40 consumers paid a year ago
before that amount headed downward. For most of summer 2017, the
average price hovered around $2.30 or trended lower.
If the higher prices pinch your budget or affect your vacation plans, there are ways to save money on gas.
For starters, shop around.
Depending on where you
live, there can be big price swings between gas stations. For instance, a
review of the Los Angeles area found a difference of about $1 per
gallon between the highest- and lowest-price stations, DeHaan said.
While the difference in price per gallon may only be a few pennies, it still adds up.
"Even if it's a difference of a nickel or dime, that could become a couple hundred dollars in savings," DeHaan said.
Also, if you cross state lines in your driving, be
aware that there can be stark differences in price from one state to the
next.
"Sometimes the difference can be 40 cents or even 80 cents a gallon," DeHaan said.
Additionally, if you can
plan ahead by using an app to find the best prices along your route, do
it, DeHaan said. Some gas stations also offer discounts if you pay with
cash.
AAA offers these tips for saving on gas as you drive:
Slow down. The
faster you drive, the more fuel you use. Every 5 miles per hour over 50
mph is like paying an additional 18 cents per gallon, according to the
Department of Energy.
Share work or school rides by carpooling, or consider public transportation.
Do not use your trunk for long-term storage. The heavier your car, the more fuel it uses.
Combine errands. If possible, park in a central spot and walk from place to place.
Soaring output, weak U.S. oil prices to fuel record outflows
American refiners may be near limits on local oil processing
Selling more than two million barrels a day of U.S. crude overseas may soon be the new normal.
The
U.S. sent out record amounts of crude to foreign destinations last
week, with domestic output hitting an all-time high, thanks to growth in
the Permian Basin.
The ballooning production has weakened benchmark West Texas
Intermediate crude at Cushing, Oklahoma, relative to its international
counterpart Brent, making it attractive to buyers overseas.
"We
will push into 2 million barrels a day consistently over the summer,"
said Rob Thummel, managing director at Tortoise, which handles $16
billion in energy-related assets. The nation will likely expand its
share in the world crude market to 18 percent from 12 percent in the
next couple of decades, he said.
Once the world’s largest importer of crude, the U.S. now is closing in on Russia
to become the world’s largest producer. America exported 2.33 million
barrels a day of oil last week, the highest on record going back 25
years, Energy Information Administration data released Wednesday showed.
This month, shipments averaged 1.76 million a day. The EIA also
reported that U.S. crude output jumped to 10.6 million barrels a day.
As
long as Permian production remains strong, that WTI "discount should
remain and then you definitely should still see strong demand for
exports,” said Joseph Bozoyan, a portfolio manager at Manulife Asset
Management LLC in Boston.
Earlier this month, WTI traded at the
biggest discount to its global counterpart since January. Signs that the
spread will widen further through the year will help boost exports as
traders may take advantage of cheaper U.S. oil.
Besides,
U.S. refineries may already be at their limits in terms of consuming
local shale oil which is almost entirely light, low-sulfur crude,
Thummel said. Plants sitting in the country’s main refining belt along
the U.S. Gulf Coast are designed to use mainly heavy, high-sulfur crude
and their intake of light, low-sulfur crude is at most a third of their capacity.
"This is where exports becomes more significant," Thummel said.
The decision to look at gas pipeline approval comes as part of Trump’s push to reduce infrastructure regulation and as US natural gas exports soar.
Federal Energy Regulatory Commission (FERC) Chairman Kevin McIntyre
said that he would review the 1999 regulation for natural gas pipeline
approval in his Senate approval hearing at the end of 2017. The Commission published a Notice of Inquiry 19 April seeking stakeholder engagement in the review process.
“The Commission also is seeking feedback on the transparency, timing,
and predictability of its certification process. FERC is encouraging
commenters to specifically identify any perceived issues with the
current analytical and procedural approaches, and to provide detailed
recommendations to address these issues,” read a press release
announcing the review.
Use of eminent domain, concerns of over-building and the prevention
of unnecessary environmental damage are among the focuses of the
inquiry. The Commission will continue to process natural gas projects as
the review takes place.
Commissioners have previously been split be decisions to approve pipeline infrastructure. In his dissent to the approval of the PennEast pipeline
in January, Commissioner Richard Glick said that FERC overly relies on
contracted volume between customers and suppliers, who are often owned
by the same company. In the case of the Penn East pipeline, 75% of the
contracts for supply came from PennEast affiliates.
The Commission is one of twelve agencies that earlier in April agreed to cooperate in implementing President Trump’s policy to streamline environmental permitting for infrastructure projects.
Trump’s infrastructure plan, released in February, similarly looked to minimise the effect of environmental regulation on those developments.
The first VLCC to directly load a cargo at the Louisiana Offshore Oil Port arrived at the port of Huizhou, China, on Sunday.
The Shaden departed LOOP on February 18 after a loading time of about
five days. The Saudi Arabian-flagged VLCC is owned by Bahri and took
approximately two months to reach its final destination on the east
coast of China, according to Platts vessel-tracking software cFlow.
Prior to arriving at Huizhou, the Shaden had previously stopped at Rizhao, China, on April 17
Shell loaded Mars onto the Shaden, with Unipec reportedly taking the crude to ports in China.
As the only US Gulf Coast export facility that does not require
Aframax or Suezmax vessels for reverse lightering on to a VLCC, LOOP is
poised to become a major export hub in coming years.
Month on month, the Dubai/WTI swap spread has widened 97 cents,
putting second-month Dubai at a $1.43/b premium over front-month WTI. As
the spread widens, WTI-based sour grades produced in the US Gulf become
more competitive with Dubai-based Middle Eastern sour grades in export
markets, including those in Asia.
The assessed value of Mars reached a 10-month low February 6, when it
was assessed at WTI cash minus $1.65/b. Since then, the grade has
increased $1.55 its current assessed value of WTI cash minus 10 cents/b.
Strong export demand from Asia has helped boost the price of Mars in
recent weeks, with that demand expected to continue, according to market
sources.
U.S. President Donald Trump slammed OPEC for inflating oil prices after the cartel showed a willingness to further tighten crude markets.
“Looks
like OPEC is at it again,” Trump said on Twitter, not long after energy
ministers finished their meeting in Jeddah, Saudi Arabia. “Oil prices
are artificially Very High! No good and will not be accepted!”
The
president’s ire followed a stream of bullish signals from a meeting of
oil producers in Saudi Arabia, chiefly from the kingdom’s Energy
Minister Khalid Al-Falih. The crude glut that’s weighed on prices for
three years has almost been wiped out by OPEC’s production cuts, but
instead of celebrating victory the group is finding reasons to keep
going and drive fuel inventories even lower.
Brent crude, the international benchmark, fell about 69 cents
at the time of the tweet, before trading down 0.8 percent at $73.17 a
barrel as of 2:31 p.m. in London.
The
purpose of the shift in OPEC’s target was clear: There’s capacity for
prices to rise even further beyond their current three-year high,
Al-Falih said.
“We have seen prices significantly higher in the
past, twice as much as where we are today” and the global economy has
the ability to absorb costlier crude, the Saudi minister said.
International
oil prices surged to almost $75 a barrel this week and U.S. gasoline is
the highest in almost three years. Yet OPEC’s choke-hold on its own
production is only getting tighter. Saudi Arabia is said to desire crude
closer to $80.
Accusation Denied
The
closest U.S. allies within the Organization of Petroleum Exporting
Countries rejected Trump’s accusation. Prices aren’t artificially high,
said United Arab Emirates Oil Minister Suhail Al Mazrouei. Saudi
Arabia’s Al-Falih echoed that view.
“We are doing our role to correct the market,” Al Mazrouei
said. “There are many things affecting the market, not just supply and
demand,” including geopolitics that are beyond OPEC’s control, he said.
Russia,
Saudi Arabia’s most important ally in the production cuts, gave its
backing to continuing the cuts until their end-2018 expiry. There’s no
obligation to stop just because the pact’s initial goal -- stockpiles in
industrialized nations back in line with the five-year average -- is at
hand, said Energy Minister Alexander Novak.
Helping Texas
Novak
also rejected Trump’s accusation, while also arguing the group’s
production cuts have helped U.S. producers to boost output. "The deal
helped to restore the industry of Texas," he said in an interview with
Bloomberg television.
Soaring U.S. shale production has been a
nagging concern for OPEC and its allies, but the group’s key players
appear to be more fixated on the immediate benefits of high crude prices.
Saudi Arabia needs to cover weighty domestic spending and attract
investors to a partial sale of its state oil company, Aramco. Russia is
relishing its new role as a major Middle East power broker, while also
enjoying bigger financial gains than anyone from the accord.
“Russia
is keeping all options open and Saudi Arabia is talking about a 2019
extension,” UBS Group AG analyst Giovanni Staunovo said by email.
Going Deeper
Novak
wouldn’t rule out some easing of the production cuts this year, but
said it would depend entirely on the situation in the market. For now,
the group is cutting ever deeper, and Saudi Arabia’s Al-Falih chided
nations that haven’t been implementing their fair share of the curbs at
the opening session of the Jeddah talks. Iraq and Kazakhstan have
pledged to improve their compliance, according to the closing statement
from the meeting.
Overall, OPEC and its allies cut 49 percent
deeper than the agreed 1.8 million barrels a day in March, according to
the statement. That’s the biggest reduction ever and the seventh month
the group has surpassed its target, Novak said.
Much of those additional reductions weren’t intentional, according to the International Energy Agency. An economic crisis and “chronic mismanagement”
dragged Venezuela’s output to a multi-decade low, while Angola lost
production from aging fields. Others were temporary, such as field
maintenance in Algeria. The involuntary cuts may keep getting deeper if Trump reimposes sanctions on Iran next month.
Ministers
seemed to embrace the notion of a significantly tighter oil market.
Saudi Arabia in particular gave a strong indication that higher prices
wouldn’t be a bad thing. Every year the world needs to develop new daily
production capacity of about 4 million to 5 million barrels and invest
hundreds of billions of dollars, but that’s not happening right now,
Al-Falih said.
By: Angelina Rascouet, Wael Mahdi, Elena Mazneva and Grant Smith
— With assistance by Alex Longley, Annmarie Hordern, Hussein Slim, and Giovanni Prati
Mexico’s
Pemex is to increase its crude processing levels in April as it
recommences operations at three refineries, with a total combined
capacity of 790,000 bpd.
The state-owned company has also announced plans to increase it oil storage capacity following the signing of a contract with Olstor Services.
The contract, which is the first of its kind to be formalised with a
private enterprise, will see Pemex Transformación Industrial gain
greater flexibility and reliability for the supply of fuel and other oil
products to cover the demand of its clients in the BajÃo region.
This is one more way in which the tools provided by the new legal
environment and regulatory framework of the Energy Reform are being
actively used, allowing the company to develop a new oil product storage infrastructure with third-party involvement to further improve and strengthen the country’s energy supply.
Additionally, the company is restarting operations at three
refineries. It is currently restarting its 275,000 bpd Minatitlan and
190,000 bpd Madero refineries after the company completed major
maintenance works at both facilities that began in second-half 2017.
Pemex is also restarting a catalytic unit at its 315,000 bpd Tula
refinery, where it had carried out maintenance works since December
2017, the company said.
Despite
healthy April VLCC cargo volumes for both MEG and WAfrica/East, these
have not been sufficient to lift the struggling rate levels.
Indeed, rates have even softened slightly. VLCC earnings of around
$5,000-$7,000 per day (for non eco types) is hardly sustainable over
time but ships remain more than ample for now, Fearnleys reported.
The market would need to see increased volumes for all the major VLCC routes to lift the dismal earnings seen today.
The West Africa Suezmax market saw a quiet week. In the MEG, there
continued to be a steady stream of cargoes, particularly out of Basrah
where Suezmaxes were the preferred size range over VLCC’s.
Finally after a short delay, 1st decade West Africa cargoes began to
show earlier this week and have continued to flow. Cargoes have become
destination sensitive with owners preferring longer voyages with better
flat rates.
The Black Sea and Med were fairly quiet this week. There is a
particularly big CPC programme for May and when the activity does pick
up and if West Africa continues to remain busy then this could be a
catalyst to put pressure on rates.
Bunkers are becoming increasingly expensive on the back of the oil
price breaching $70 per barrel putting further pressure on owners
earning potential.
Aframaxes in the North Sea and Baltic experienced an upswing in rates
last week, due to a rush of Baltic cargoes in the 18-20 window. Rates
topped out on Monday and once again softened as this years’ ice season
was coming to an end.
Hopefully, the upcoming summer market will deliver, as the ice season has been rather disappointing, Fearnleys said.
The Med and Black Sea market was boiling this week. Charterers were
trying to secure a cheap, safe ship at low levels. Libyan activity
helped owners and now we at least see numbers starting with an eight.
Going forward we expect rates to stabilise around the current levels, Fearnleys concluded.
Stealthgas announced this week the delivery of its last newbuilding LPG
carrier, which marks the completion of its contracting programme.
The vessel delivered was a 22,000 cu m Ice Class semi-refrigerated
hybrid scrubber fitted eco LPG carrier - ‘Eco Freeze’, the fourth and
final semi- refrigerated eco LPG newbuilding.
Her delivery concluded Stealthgas’ expansion phase, which commenced in
2011 and totalled 26 newbuilding LPG carriers out of which, 20 were
delivered from Japanese yards and six from South Korean yards.
Crowley Alaska Tankers also announced this week that it has completed
the acquisition of three tankers from SeaRiver Maritime, under a
charterback deal covering varying multi-year terms.
The Aframaxes ‘Liberty Bay’ and ‘Eagle Bay’ transport crude from Alaska
to US West Coast refineries. The MR ‘S/R American Progress’ ships
refined petroleum between the US Gulf and US East Coast ports.
Crowley has renamed the ships ‘Washington’, ’California’ and Oregon’, respectively.
“With the regulatory approvals in place and the sale officially
complete, we are now focused on operating these tankers in the safest,
most reliable manner possible,” said Tom Crowley, Crowley Maritime Corp
chairman and CEO. “Our knowledge, passion, talent, ingenuity and
helpfulness drive business for the company and provide the basis for
highly successful partnerships, such as the one announced today.”
With the acquisition of the three vessels, the company now operates 40 Jones Act-qualified tankers in the US.
Crowley Alaska Tankers, based in Bellingham, Washington, with a field
office in Valdez, Alaska, is a new subsidiary of Crowley Petroleum
Holdings, part of the Crowley Maritime Corp group of companies.
Navios Maritime Acquisition Corp also announced that it had completed a $71.5 mill sale and leaseback agreement for four MR2s.
The proceeds were used to write off $69.25 mill of debt.
This agreement provides for 24 quarterly payments of $1.5 mill each,
plus interest at LIBOR plus 305 bps per annum. Navios Acquisition has an
obligation to purchase the vessels at the end of sixth year for $35.8
mill.
Angeliki Frangou, Navios Acquisition chairman and CEO, said, “We are
pleased to have concluded a sale and leaseback agreement for four
product tankers with a leading Chinese institution. We look forward to
continuing to develop access to this attractive financing market.”
Broking sources reported the sale of the 2003-built VLCC FSO ‘Sea
Equatorial’ to Ocean Tankers for $18.5 mill and the same vintage Aframax
‘Zirku’ to ZPMC for $10.5 mill. She will be converted to a
semi-submersible heavy lift carrier.
Shandong Shipping was said to have bought the 2009-built MR sisters
‘Silver Express’ and ‘High Enterprise’ for $16.5 mill each, while PCL
Shipping was believed to have purchased the 2013-built MR sisters ‘STI
Fontivieille’ and ‘STI Ville’ for $26.5 mill each.
Finally, Nigerian interests were thought to have picked up the
2004-built Handysize ‘Rosita’ for a price said to be in the high $9
mills.
In the charter market, Navig8 was very active, reportedly taking four LR2s for six, option six months at $15,250 per day each.
Another LR2, the 2017-built ‘Searover’ was said to have been fixed to
Chevron for 12 months at $15,500 per day, while Shell was reported to
have fixed the LR2 newbuilding ‘Salamina’ for about $15,000 per day.
In the MR segment, the 2008-built ‘DL Navig8’ was believed taken by ST Shipping for 12 months at $12,750 per day.
Meanwhile, VLCC ordering continued.
Among the latest contracts placed were two VLCCs at DSME for Guggenheim Capital for a reported $88.4 mill each.
As promised, natural gas pipeline giant Kinder Morgan(NYSE: KMI) returned to growth mode in 2018.
Overall, the company hauled in $1.247 billion ($0.56 per share) of
distributable cash flow during the first quarter, which was 3% higher
than the year-ago period, and beat its forecast.
Those strong results, when combined with an improving financial
profile, enabled Kinder Morgan to follow through with its promise to
boost its dividend by 60% this year.
Kinder Morgan Inc. results: The raw numbers
In millions of dollars. Data source: Kinder Morgan Inc. Chart by author.
Kinder Morgan's natural gas pipeline segment delivered a strong
performance in the first quarter, with earnings rising 6% year over
year. Fueling that increase was the impact of colder weather (which
drove up gas demand), an improvement in drilling activities thanks to
better pricing and recent projects placed into service. Overall, natural
gas transportation volumes rose 10% versus the prior year.
Carbon dioxide segment earnings improved 7% due to higher commodity prices and a 5% hike in oil production.
Product pipeline earnings edged up 1% due to increased
contributions from two pipeline systems, which more than offset weakness
on another one.
Earnings in the terminals segment slipped 2% even though volumes
went up 5% thanks to recently completed storage capacity expansions.
Lower rates on some of the company's existing tankers and falling
storage tank utilization in several locations offset the positive impact
from its growth projects.
Contributions from Kinder Morgan Canada Limited's (TSX: KML)
Trans Mountain Pipeline jumped 7% year over year due to how the company
capitalized costs for that pipeline's expansion project.
Image source: Getty Images.
What management had to say
CEO Steve Kean commented on the quarter and the company's progress:
One of the strengths of this company is strategically positioned
fee-based assets that generate predictable cash flows, and this quarter
once again demonstrated that strength. Several business units achieved
strong financial performance in the first quarter and are poised to
continue that success through the remainder of the year. During the
first quarter, we made substantial progress on the Elba Liquefaction
Project and began work on the Gulf Coast Express Project. We had very
good commercial and operating performance, exceeding our plan for the
quarter.
Overall, Kinder Morgan generated $804 million in excess cash above
what it will pay out via its increased dividend for the quarter. The
company used that money to fund projects like Elba and the Gulf Coast
Express and still had enough left over to buy back another $250 million
in shares, adding to the $250 million it spent last December.
In addition to making progress on those two key growth projects,
Kinder Morgan completed work on about $700 million of expansions during
the quarter. The company quickly replenished its backlog by adding $900
million of new high-return projects to the fold. Because of that, it now
plans to spend about $100 million more this year, bringing its capital
budget up to $2.3 billion. However, its financial plan included more
than $500 million of unallocated cash flow, giving it the flexibility to
invest that money into new projects like those it recently secured as
well as repurchase shares.
Looking forward
Thanks to that strong quarter, Kinder Morgan remains on pace to meet
or exceed its target for both distributable cash flow ($4.57 billion or
$2.05 per share) and leverage (5.1 times debt to EBITDA) for 2018.
While its outlook for 2018
looks positive, though, its future growth prospects dimmed significantly
earlier this month when Kinder Morgan Canada threatened to abandon
the Trans Mountain Pipeline expansion. The company gave a tight
deadline of the end of next month to gain the clarity and protection it
needs to move forward. Kean went so far as to say on the quarterly
conference call that "it has become clear this particular investment may
be untenable for a private party to undertake. The events of the last
10 days have confirmed those views." Consequently, the company could
abandon the project or potentially sell it to the federal government and
Alberta, which both deem it as a vitally strategic one for the country
and the oil sands region. Given the overhang of this uncertainty, shares
of Kinder Morgan could be quite volatile until it finally has a firm
outcome for this project.
A
man wears a cap with the logo of PDVSA at the swear-in ceremony of the
new board of directors of Venezuelan state oil company PDVSA in Caracas,
Venezuela, January 31, 2017.
REUTERS/Marco Bello
CARACAS (Reuters) - Chauffeured around in a sleek black pick-up, the
head of Venezuela's oil industry, Major General Manuel Quevedo, last
month toured a joint venture with US major Chevron.
Flanked by
other trucks carrying security guards, Quevedo passed a handful of
workers waiting by an oil well cluster. They wanted a word with the OPEC
nation's oil minister and president of its state-run oil firm, PDVSA,
about the sorry state of the company.
Quevedo and his caravan drove on by.
"He didn't get out to ask workers about what is going on," said Jesus
Tabata, a union leader who works on a rig in the oil-rich Orinoco Belt.
"That way it's easier to keep saying everything is fine — and at the
same time keeping us on like slaves on miserable wages."
What's going on is that thousands of oil workers are fleeing the
state-run oil firm under the watch of its new military commander, who
has quickly alienated the firm's embattled upper echelon and its
rank-and-file, according to union leaders, a half-dozen current PDVSA
workers, a dozen former PDVSA workers and a half-dozen executives at
foreign companies operating in Venezuela.
Venezuela Oil Minister Manuel Quevedo at the beginning of an OPEC meeting in Vienna, Austria, November 30, 2017.
Thomson Reuters
Some PDVSA offices now have lines outside with dozens of workers waiting
to quit. In at least one administrative office in Zulia state, human
resources staff quit processing out the quitters, hanging a sign, "we do
not accept resignations," an oil worker there told Reuters.
Official workforce statistics have become a closely guarded secret, but a
dozen sources told Reuters that many thousands of workers had quit so
far this year — an acceleration of an already troubling outflow last
year.
About 25,000 workers resigned between the start of January
2017 and the end of January 2018, said union leader and government
critic Ivan Freites, citing internal company data. That figure comes out
of a workforce last officially reported by PDVSA at 146,000 in 2016.
Resignations appear to have increased sharply this year, said Freites, a
prominent union leader atVenezuela's major refineries in the northern
Paraguana peninsula.
"It's unstoppable," he said.
Many
of those leaving now are engineers, managers, or lawyers — high-level
professionals that are almost impossible to replace amid Venezuela's
economic meltdown, the PDVSA workers and foreign executives told
Reuters.
PDVSA and the Oil Ministry did not respond to repeated
requests for comment. PDVSA board member and pro-government union
representative Wills Rangel acknowledged the flight of talent is a
serious problem.
"The massive resignations are worrying," Rangel said in an interview. "In refinery operations, many have left."
Venezuelan
President Nicolas Maduro at a pro-government rally with workers of
state-run oil company PDVSA, in Barcelona, Venezuela, July 8, 2017.
Thomson Reuters
The pace of departures has quickened with the rapid deterioration of
PDVSA's operations and finances — radiating pain through the OPEC
nation's oil-based economy, now beset with food shortages and
hyperinflation.
Quevedo — a little known former housing minister who replaced two
executives jailed for alleged graft — has further poisoned the
atmosphere, according to the two dozen sources who spoke with Reuters.
A stiff official who rose through the National Guard, Quevedo fired
many long-term employees upon arrival and urged remaining ones to
denounce any of their colleagues who oppose Maduro. He tapped soldiers
for top roles, giving the oil firm the atmosphere of a "barrack," two
company sources said.
"The military guys arrive calling the
engineers thieves and saboteurs," said a Venezuelan oil executive at a
private company who frequently works with PDVSA.
Quevedo is also
fighting to retain control of a company increasingly riven by turf
wars. The ruling socialists, once held together by late leader Hugo
Chavez, have succumbed to infighting under Maduro, a former bus driver
and union leader who lacks Chavez' charisma and has seen his budget
slashed with the decline in global oil prices.
Quevedo has
clashed with Venezuela's powerful Vice President Tareck El-Aissami. When
El-Aissami in February appointed a vice president to the PDVSA unit
that oversees joint ventures with foreign companies, Quevedo removed the
appointee and had him arrested, according to three sources with
knowledge of the incident, which has not been previously reported.
Quevedo is an ally of Socialist Party heavyweight Diosdado Cabello.
"There is a fight between Diosdado and Tareck for control of the
industry," said Hebert Garcia, a former army general who later broke
with Maduro and fled the country.
Venezuelan
President Nicolas Maduro, right, and then-National Assembly President
Diosdado Cabello at a military parade commemorating the 23rd anniversary
of a failed coup attempt by late president Hugo Chavez, in Caracas,
February 4, 2015.
Reuters
The political turmoil and mass resignations threaten Maduro's
government, which depends on oil for 90 percent of export revenue.
In the Orinoco Belt, some drilling rigs are working only intermittently
for lack of crews, said two sources there. In PDVSA's refineries,
several small fires have broken out because there are no longer enough
supervisors, two sources in the northern Paraguana peninsula said. Lack
of personnel in export terminals have forced some ports to cut back
working hours, according to two shippers and one trader.
Oil production in the first quarter of this year slipped to a 33-year low of 1.6 million barrels per day.
'When are you leaving?'
Jobs at PDVSA were once coveted for their generous salaries and
benefits, including cheap credit for housing. Now, many PDVSA workers
can't feed their families on wages that amount to a handful of US
dollars a month.
Rampant food shortages that caused Venezuelans
to report losing an average of 11 kilograms (24 pounds) last year are
particularly tough for oil workers tasked with grueling physical work in
often remote oil fields.
Some oil workers have resorted to
working odd jobs on the side, taking vacation to work abroad, or even
selling their work uniforms — red overalls — for money to eat.
Some workers in Lake Maracaibo, a production region near Colombia, can
no longer get to their jobs, according to two sources there. Transport
can cost up to 55,000 bolivars — equal to only 10 US cents, but close to
what some workers earn in a day.
"Now what we ask each other is: 'When are you leaving and for where?'"
said one of the Maracaibo workers, who like thousands of other
Venezuelans emigrated to Colombia this month. "Even in the bathroom,
people are talking about quitting."
'Who will be left?'
The
logo of the Venezuelan state oil company PDVSA next to a mural of late
Venezuelan President Hugo Chavez at a gas station in Caracas, March 2,
2017.
Thomson Reuters
At
PDVSA headquarters, Quevedo often walks through the offices with a half
dozen bodyguards who clear his path, according to one current and one
former PDVSA employee.
The company's ongoing decay is evident
all around him in the once polished office tower: Broken elevators, poor
cafeteria food, empty desks in once-crowded divisions.
Maduro
has overseen the arrest of dozens of high-level PDVSA executives since
late last year, sometimes at the Caracas headquarters as shocked
employees looked on. Workers now feel watched by supervisors and are
loathe to make any business decision out of fear they will later be
accused of corruption, the sources said.
PDVSA workers, often visibly thinner, sometimes surreptitiously hand
out resumes to executives from private companies, according to a source
at a foreign firm.
In a rare protest last month, angry Oil
Ministry workers blocked access to the cafeteria, demanding better
benefits and chanting that Quevedo should resign.
A
man points a fuel nozzle at the camera for a photograph at a gas
station belonging to Venezuelan state oil company PDVSA in Caracas,
Venezuela, July 21, 2016.
Thomson Reuters
Venezuela's foreign oil partners, which include California-based
Chevron, Russia's Rosneft and China's CNPC, are increasingly worried
about PDVSA's rapidly departing workforce, according to a half-dozen
sources at multinational companies operating in Venezuela. But as
minority partners, they have little or no sway over salaries and
management.
The foreign partners have also grown increasingly
frustrated with Quevedo, who initially asked for their suggestions on
fixing the state-run firm but now appears ill-disposed toward reforms,
the sources said.
At least one foreign company is considering
bringing in foreign specialists to improve its operations, one of the
sources added. But with crime, power cuts and shortages rampant in
Venezuela, luring foreign professionals is tough.
Still, in the Orinoco belt, some vow to stay in the belief that Maduro's government can't last.
"We can't give up," said Tabata, the union leader who watched Quevedo's
truck drive by that day. "This government is unstable and could fall at
any moment — and who will be left?"
(Reporting by Deisy
Buitrago and Alexandra Ulmer; Additional reporting by Mircely Guanipa in
Punto Fijo, Marianna Parraga in Houston, and Brian Ellsworth in
Caracas; Writing by Alexandra Ulmer; Editing by Brian Thevenot)
Valero Energy Corp., which operates this refinery in .Corpus Christi,
has stopped importing light, sweet crude because of the growing domestic
supply. (Valero Energy photo)
In Africa and the Middle East refinery maintenance has been slowing down
but news continues to emerge of planned upgrades and new launches,
according to S&P Global Platts estimates.
-- The hydrocracker
at Cote d'Ivoire's SIR refinery will restart in March 2019, a source at
SIR told S&P Global Platts. The hydrocracker has been offline since
early 2017 due to a supply outage.
-- Sudan's Khartoum refinery
will kick off its maintenance program for 2018 on March 17, with the
partial closure for around one month of the crude distillation unit with
a nameplate capacity of 50,000 b/d, a source from the Khartoum Refining
Company said. The repair works are being done in several stages to
limit the reduction in fuel supplied to the local market at any one
time. This is to be followed by the full closure of the second CDU,
which has a total capacity of 40,000 b/d for 45 days from April 1. The
first CDU will then go back into maintenance in September for one month.
--
Libya's National Oil Corporation hopes to finally restart operations at
the 220,000 b/d Ras Lanuf refinery before Ramadan in May, sources close
to the company said. Restarting refinery operations would also allow
NOC to bring Libya's petrochemicals industry back online, producing
ethylene and polyethylene, the state-owned company said in statement.
The Ras Lanuf ethylene plant has been shut since 2011, while the
polyethylene plant was closed in 2013. The statement did not refer to
the refinery in the east of Libya itself, but this would need to be
restarted for the polymers plants to begin production. They will be fed
with naphtha from the refinery. Ras Lanuf was heavily damaged in 2011
during Libya's revolution and subsequent clashes between rival militias.
--
Durban's Engen refinery in South Africa is now fully up and running,
the company said. The maintenance started February 5 and in late March
was entering a "phased start-up" of its units.
-- Ghana's Tema
Oil Refinery (TOR), which had restarted in early January after almost a
year, is currently running at 25,000 b/d, and will operate closer to
full capacity by the end of the year, a source close to the matter said.
Currently, only one distillation unit is running out of the three
units, the source added, and once all three are in operation, this
should bring the capacity close to the full 45,000 b/d. Meanwhile, the
fluid catalytic cracker, was last reported as undergoing maintenance
with a relaunch date of April 2018.
-- Saudi Aramco Total
Refining and Petrochemical Co. (Satorp) has maintenance on its No.1 CDU
from January 8. The works include the Jubail refinery's Train 1,
involving a 200,000 b/d CDU. Separately, there was maintenance on a
153,000 b/d hydrocracker, traders said.
-- Sonangol's Luanda is to undergo maintenance work in June and July, the first such works in almost seven years.
--
Sapref, the largest refinery in South Africa, is undergoing "routine
maintenance," the company said in early April without providing further
details. According to market sources various units are scheduled to have
works between April and June, affecting, gasoline and marine fuel.
Separately, in November output of marine fuel is to be impacted by
maintenance.
-- South Africa's Natref will be undergoing partial
works for six weeks in May to June and later in November, industry
sources said. Sources said the plant will undergo partial maintenance
from May 3 to June 14 which will affect the production of middle distillates, bitumen and hydrogen. The plant will also later carry out partial works over November 1-19, affecting supplies of diesel, gasoline and bitumen, sources said.
FUTURE WORK
-- Zambia's Indeni refinery has set its next
turnaround for September/October 2018. It is currently operating at
around 18,000 b/d out of its total capacity of 24,000 b/d, a senior
official from the refinery said.
-- South Korea's GS Engineering
& Construction Co. has won a contract to repair units at the Ruwais
refinery in the UAE damaged in a fire in January 2017. GS said it will
restore fire-damaged parts of the oil processing plant at Ruwais by
early 2019. ADNOC had initially hoped to restart production from the
residual fluid catalytic cracking unit in Q1 2018.
UPGRADES
-- Kuwait National Petroleum Co. will begin
commissioning newly installed units by April, once it has completed its
Clean Fuels Project to revamp the country's main refineries, Mina
al-Ahmadi and Mina Abdullah. It is also considering the addition of two
new gas processing units, Kuwait's sixth and seventh, which will boost
LPG output, by 2035, KNPC CEO Mohammad Ghazi al-Mutairi told Al-Rai
newspaper. -- Abu Dhabi National Oil Co. awarded a contract to Samsung
Engineering worth $3.1 billion for a major upgrade of its Ruwais
refinery, which will allow it to process offshore crude, freeing up as
much as 420,000 b/d of its flagship Murban crude for export. The crude
oil processing flexibility project is scheduled to be completed by the
end of 2022.
-- Nigeria's four state-owned oil refineries -- two
in Port Harcourt and one each in Kaduna and Warri -- are to be shut for a
major overhaul to restore production to their combined nameplate
capacity of 445,000 b/d. Nigeria is banking on signing the deal for its
refinery rehabilitation program by end-April and sorting out the
financing in the second quarter, an official from state-owned NNPC said
Tuesday. This program is aimed at ensuring that the existing refineries
operate at 90% capacity by 2019.
-- Jordan Petroleum Refinery Co.
has awarded a contract to US engineer KBR for the design of a new
residue hydro-processing unit as part of its expansion of the Zarqa
refinery in Jordan.
-- Bahrain Petroleum Co. has awarded a $4.2
billion contract for the expansion and modernization of the Sitra
refinery, slated for completion in 2022 and taking total capacity to
360,000 b/d.
-- Iraq has started work on a 70,000 b/d expansion
of its Basra refinery, in the south of the country, raising its capacity
to 280,000 b/d from 210,000 b/d, with the addition of a fourth crude
unit. The oil ministry hopes to complete the new distillation unit by
the end of the year. Along with a crude distillation unit, the project,
which is being executed by TechnoExport of the Czech Republic, also
includes the construction of units for the treatment of NGLs and water,
as well as steam boiler and flare system.
-- US engineer CB&I
has been awarded a $95 million contract for the expansion and
modernization of the 305,000 b/d Saudi Aramco Shell Refinery (Sasref) in
Jubail.
-- Iraq's North Refineries Co. is compiling a list of
international equipment suppliers as the oil ministry prepares to
rebuild the 140,000 b/d Salah al-Din refinery, part of the 350,000 b/d
Baiji refining complex.
-- Iran plans to modernize Abadan, the country's oldest refinery.
-- Zambia's Indeni refinery is looking for an equity partner as it seeks to boost capacity, a refinery spokesman said.
--
Sonangol is planning to build a fluid catalytic cracker at the Luanda
refinery to enable it to produce 1,200 mt/day of gasoline, up from
current output of 380 mt/day, Angola's Mining and Petroleum Minister
Diamantino Azevedo said. The unit, expected to come online in mid-2021,
will meet half the country's demand for the product, reducing the
current market deficit, Azevedo said.
-- The Republic of Congo's
refinery in Pointe Noire is planning to build a fluid catalytic cracker
before 2022, the plant's director said. The move is an effort to reduce
its current production of fuel oil from 40% and to meet cleaner fuels
standards. It is the only refinery in the Republic of Congo, and it is a
key exporter of fuel oil, particularly low sulfur straight run fuel
oil, and naphtha in the West African region.
-- Gabon's Societe
Gabonaise de Raffinage (Sogara) is seeking a waiver from the government
to continue producing high sulfur gasoil after cleaner fuels standards
are enforced across Africa in 2020, a source close to the matter said.
Sogara's plans to build a second refinery in Port Gentil in conjunction
with Samsung have also been scrapped, the source said.
--
Senegal's Dakar is currently running at its full capacity of 1.2 million
mt/year and plans are still underway for the plant to increase its
capacity to 1.5 million mt a year by 2019, according to company
officials. In an interview published on the SAR website, the refinery's
technical director, M Abdou Aziz Deme, said that the refinery had been
struggling to operate at its capacity for several years but in 2017 it
produced at record-high levels. The previous low rates of the plant were
due to the financial issues that engulfed the refinery. In October last
year, SAR carried out "renegeration" works at the refinery's catalytic
reforming unit and it is now producing gasoline, another company source said.
LAUNCHES
-- Iraq opened a downstream tender on October 23 hoping
to attract engineering and construction companies to build a new
refinery in Basra province.
-- The Dangote refinery in Lagos,
Nigeria, will receive its essential parts -- a crude distillation unit
and residual fluid catalytic cracker -- in July, a senior official from
Dangote Industries told S&P Global Platts. The source confirmed the
foundations for the entire site had been fully "piled" and it was now
waiting on the CDU and RFCC deliveries. The completion date was last
heard to be 2020, but the source at Dangote could not confirm a
completion deadline.
-- Algeria has scaled back plans to expand
its downstream sector rapidly, dropping plans to build five new 5
million mt/year (100,000 b/d) refineries, and pushing ahead with only
two new projects: 5 million mt/year at Hassi Messaoud and 5 million
mt/year at Tiaret.
-- Honeywell said Kuwait Integrated Petroleum
Industries Co. will use a range of its technologies for the refining and
petrochemical complex at Al-Zour.
-- Angola's Sonangol hopes to
have more details on which international partner it will tie up with for
its new refining project in the first quarter.
-- Kuwait has
committed itself to building a new 230,000 b/d refinery at Duqm with its
Persian Gulf neighbor Oman, signing a final investment decision for the
refinery project.
-- Saudi Aramco aims to start up its
greenfield 400,000 b/d Jizan refinery in the second half of 2018 as the
project is nearly completed.
-- Construction of the 140,000 b/d
Karbala refinery, Iraq's first new downstream facility in decades, has
stalled due to a lack of finance.
-- Iraq has signed a deal with
two Chinese oil companies to build a new 300,000 b/d refinery and
petrochemicals complex at Al-Fao in southern Iraq.
-- Nigeria has
reached an agreement with neighbor Niger to build an oil refinery in a
border town between Niger and Katsina State in northern Nigeria.
--Kenya is hoping to soon decide the location for a new refinery in either Lamu or Mombasa.
--
Ghana's Ministry of Energy is currently in the process of submitting a
proposal to build a new refinery in Tema, a source close to the matter
said. "We are yet to submit the proposal to the Cabinet for approval but
Tema Oil Refinery has already started talking to some prospective
partners," the source said. "Both the ministry and TOR are in agreement
that the new refinery at Tema should be the way forward." This will
replace the existing 45,000 b/d Tema Oil Refinery, which has been
offline for the bulk of the last three years, and is currently operating
at reduced capacity due to technical issues. The source added that the
"plan is to put a new 100,000-160,000 b/d refinery in the available
space of over 700 acres at the existing refinery yard" in Tema.
--
Angola's Sonangol has revived plans for its Lobito refinery project,
saying it will build a 200,000 b/d plant at the coastal city by 2022.
-- Iraq is considering a 150,000 b/d greenfield refinery project at Nassiriya.
-- Iraq on February 8 signed a contract with Rania International to build a 70,000 b/d refinery in the restive Kirkuk province.
--
Iraq's oil ministry has announced a tender for a 100,000 b/d refinery
in Qayarah, 60 km south of Mosul. It did not say whether it will be a
completely new construction or a building out of the existing Qayarah
refinery, which has a 20,000 b/d nameplate capacity but has been
operating at 4,000 b/d due to damage inflicted in the battle against the
self-proclaimed Islamic State group.
-- Houston-based GTC Technology has agreed a deal to provide a gasoline
production unit to Iraq's Al-Barham Group, which plans to build a
refining complex in the northern city of Kirkuk. The grassroots complex
will process 12,000 b/d of straight run naphtha and untreated natural
gasoline to produce high octane gasoline to Euro-V specifications, GTC
said. It will contain a naphtha hydrotreater, naphtha splitter, C5/C6
isomerization unit, and heavy naphtha reformer.
-- Iraq has
announced two new greenfield refinery contracts that would add 170,000
b/d to the more than 1 million b/d of refining capacity it already has
said it intends to bring online with new construction as well as repairs
and upgrades to existing refineries. The Oil Ministry is accepting
proposals for a 100,000 b/d refinery in Kut, Wasit province, located
east of Baghdad on the border with Iran. The second refinery will be
built Diwaniya, in Qadisiya province, south of Baghdad, with a capacity
of 70,000 b/d.
-- The Ugandan government signed an agreement with
a consortium to build and operate a 60,000 b/d refinery in the west of
the country, President Yoweri Museveni said. According to Museveni, who
presided over the signing ceremony for the Albertine Graben Refinery,
the consortium will carry out development, design, financing,
construction, operation and maintenance of the refinery in Hoima
District. The consortium is led by Nuovo Pignone International, a
General Electric unit based in Italy. It also includes Italy's Saipem
plus Mauritius' YAATRA Africa and Lionworks Group. The consortium was
selected after over 40 companies showed interest in the project, the
government said. The $4 billion facility is expected to process 30,000
b/d of crude initially, before its capacity doubles in the second phase
of development. The project is expected to come on stream by 2020.
