Volume 92 / Number 147 / Tuesday, July 29, 2014 [OIL ] www.platts.com OILGRAM NEWS Top stories Asia Pacific Jordan Cove eyes Asia for 25% of LNG sales 2 Aussie group buys Canadian LNG to serve Europe 2 Europe, Middle East & Africa Galp’s refining margin slips into the red 3 UK launches shale gas exploration bid round 3 UK’s JKX eyes more gas from Ukrainian field 4 Israeli gas output to hit 3.6 Bcf/d by 2017 5 Algeria appoints new chief at state Sonatrach 5 The Americas US refiners should rethink export stance: Murkowski 6 Markets & Data Colombia to send more troops to oil region 7 Tesoro’s Uinta Express pipe runs into zoning snag 7 Argentina crude imports steady in June, gas up 2.7% 7 ICE Brent lower amid bearish refined products 8 Iraq threatens to sue if Kurdish oil delivered to US Washington—With the latest battle between Baghdad and Erbil over crude sales reaching US shores Monday, the Iraqi central govern- ment sent warnings to lightering companies in Galveston, Texas, not to offload a cargo of Kurdish oil on the United Kalavrvta, a Suez- max tanker currently anchored 60 miles off the port. “Letters were sent to all of the lightering companies to make sure they are aware this crude oil doesn’t belong to the party pur- porting to sell it,” a senior Iraqi Oil Ministry official told Platts on condition of anonymity. “The entire market is on notice.” The tanker, which loaded Kurdish crude from the Turkish port of Ceyhan more than a month ago, has yet to offload its cargo, according to officials at the US State Depart- ment and the US Coast Guard. Earlier Monday, Coast Guard inspectors examined the ship and gave it clearance to begin lightering the crude. “There’s nothing else prohibiting it from doing business from the Coast Guard’s point of view,” Petty Officer Andy Kendrick said. “It’s free to conduct the lightering, [but] nothing has taken place yet.” A woman who answered the phone at the Galveston Pilots Association said officials there were under orders not to discuss the tanker and its activities. The Iraqi central government has sent similar letters to ports where other cargoes of Kurdish crude have approached. The letters warn that Iraq may pursue legal action against any entity that receives oil exported from the northern semiautonomous region of Kurdistan. The KRG has maintained its right to sell and market the crude produced in its fields. US crude trading and shipping sources said the owner of the United Kalavrvta’s cargo (continued on page 6) Yukos shareholders claim $50 billion win But Moscow vows to appeal Dutch court ruling London—The Permanent Court of Arbitration in the Hague Monday ordered Russia to pay over $50 billion to Yukos shareholders, ruling the oil company was subject to a politically motivated attack to appropriate its assets and to remove main shareholder Mikhail Khodorkovsky from the political stage. Russia vowed to challenge the judgment in the Dutch courts, but in London Emmanuel Gaillard, head of the Shearman and Sterling legal team that conducted the case in a pro- cess lasting 10 years, emphasized the out- come is “final and binding.” Yukos was declared bankrupt in 2006 after buckling under unprecedented tax demands and its assets, notably its 1 million b/d upstream subsidiary Yuganskneftegaz, ended up largely in the hands of state-owned Rosneft, with some also going to Gazprom. Yukos’ founder Khodorkovsky and busi- ness partner Platon Lebedev were sen- tenced to eight years in prison for tax fraud in 2005 and in a later case were found guilty of money laundering and embezzle- ment, pushing their sentences to 2014. They were pardoned in December and Janu- ary, respectively. Russia, as a party to the international arbitration court, is likely to pay up eventu- ally, despite current diplomatic tensions over Ukraine, the shareholders’ representatives said Monday. “We’re thrilled with this decision. We know it’s not the end of the road, but it is a giant step forward,” said Tim Osborne, director of GML, the holding company that indirectly owned the majority of Yukos shares. “It is a major step forward for the majority shareholders, who have been battling for over 10 years for this decision,” Osborne said. “It also demonstrates the vital role that international arbitration plays in resolving disputes of this nature. Without the bind- (continued on page 4) Russia vows to fight verdict Rosneft says operations unaffected Claimants see long fight ahead United Kalavrvta yet to be offloaded Coast Guard says will not block lightering Cargo’s buyer remains mystery
COLOMBIA TO SEND MOORE TROOPS TO OIL REGION PAG 7 PLATTS OILGRAM NEWS JULY 29 2014. ARTICULO SOBRE PETROLEO EN COLOMBIA REGION PUTUMAYO
Text of Platts oilgram news julio 29 2014 articulo pag 7 Colombia oil Orlando Hernandez
Volume 92 / Number 147 / Tuesday, July 29, 2014 [OIL ]
www.platts.com OILGRAM NEWS Top stories Asia Pacific Jordan Cove
eyes Asia for 25% of LNG sales 2 Aussie group buys Canadian LNG to
serve Europe 2 Europe, Middle East & Africa Galps refining
margin slips into the red 3 UK launches shale gas exploration bid
round 3 UKs JKX eyes more gas from Ukrainian field 4 Israeli gas
output to hit 3.6 Bcf/d by 2017 5 Algeria appoints new chief at
state Sonatrach 5 The Americas US refiners should rethink export
stance: Murkowski 6 Markets & Data Colombia to send more troops
to oil region 7 Tesoros Uinta Express pipe runs into zoning snag 7
Argentina crude imports steady in June, gas up 2.7% 7 ICE Brent
lower amid bearish refined products 8 Iraq threatens to sue if
Kurdish oil delivered to US WashingtonWith the latest battle
between Baghdad and Erbil over crude sales reaching US shores
Monday, the Iraqi central govern- ment sent warnings to lightering
companies in Galveston, Texas, not to offload a cargo of Kurdish
oil on the United Kalavrvta, a Suez- max tanker currently anchored
60 miles off the port. Letters were sent to all of the lightering
companies to make sure they are aware this crude oil doesnt belong
to the party pur- porting to sell it, a senior Iraqi Oil Ministry
official told Platts on condition of anonymity. The entire market
is on notice. The tanker, which loaded Kurdish crude from the
Turkish port of Ceyhan more than a month ago, has yet to offload
its cargo, according to officials at the US State Depart- ment and
the US Coast Guard. Earlier Monday, Coast Guard inspectors examined
the ship and gave it clearance to begin lightering the crude.
Theres nothing else prohibiting it from doing business from the
Coast Guards point of view, Petty Officer Andy Kendrick said. Its
free to conduct the lightering, [but] nothing has taken place yet.
A woman who answered the phone at the Galveston Pilots Association
said officials there were under orders not to discuss the tanker
and its activities. The Iraqi central government has sent similar
letters to ports where other cargoes of Kurdish crude have
approached. The letters warn that Iraq may pursue legal action
against any entity that receives oil exported from the northern
semiautonomous region of Kurdistan. The KRG has maintained its
right to sell and market the crude produced in its fields. US crude
trading and shipping sources said the owner of the United
Kalavrvtas cargo (continued on page 6) Yukos shareholders claim $50
billion win But Moscow vows to appeal Dutch court ruling LondonThe
Permanent Court of Arbitration in the Hague Monday ordered Russia
to pay over $50 billion to Yukos shareholders, ruling the oil
company was subject to a politically motivated attack to
appropriate its assets and to remove main shareholder Mikhail
Khodorkovsky from the political stage. Russia vowed to challenge
the judgment in the Dutch courts, but in London Emmanuel Gaillard,
head of the Shearman and Sterling legal team that conducted the
case in a pro- cess lasting 10 years, emphasized the out- come is
final and binding. Yukos was declared bankrupt in 2006 after
buckling under unprecedented tax demands and its assets, notably
its 1 million b/d upstream subsidiary Yuganskneftegaz, ended up
largely in the hands of state-owned Rosneft, with some also going
to Gazprom. Yukos founder Khodorkovsky and busi- ness partner
Platon Lebedev were sen- tenced to eight years in prison for tax
fraud in 2005 and in a later case were found guilty of money
laundering and embezzle- ment, pushing their sentences to 2014.
They were pardoned in December and Janu- ary, respectively. Russia,
as a party to the international arbitration court, is likely to pay
up eventu- ally, despite current diplomatic tensions over Ukraine,
the shareholders representatives said Monday. Were thrilled with
this decision. We know its not the end of the road, but it is a
giant step forward, said Tim Osborne, director of GML, the holding
company that indirectly owned the majority of Yukos shares. It is a
major step forward for the majority shareholders, who have been
battling for over 10 years for this decision, Osborne said. It also
demonstrates the vital role that international arbitration plays in
resolving disputes of this nature. Without the bind- (continued on
page 4) Russia vows to fight verdict Rosneft says operations
unaffected Claimants see long fight ahead United Kalavrvta yet to
be offloaded Coast Guard says will not block lightering Cargos
buyer remains mystery
2 Oilgram News / Volume 92 / Number 147 / Tuesday, July 29,
2014 Asia Pacific Aussie group buys Canadian LNG to serve Europe
SydneyAustralias Liquefied Natural Gas Limited has agreed to buy
100% of Anadarko Petroleums Bear Head LNG project in Cana- das Nova
Scotia for $11 million and plans to develop the former proposed
import terminal into an export facility to serve markets in Europe,
the company said Monday. LNG Limited is already aiming to become a
North American LNG exporter from its Magnolia project in Louisiana,
where it is planning to spend $2.2 billion developing an export
facility with an initial capacity of 4 million mt/year. The company
now intends to replicate that project model to develop a 4 million
mt/year export plant at Bear Head with capacity for future
expansion as more gas becomes available. Anadarko had invested
significantly in the Bear Head site as a proposed 11.3 million
mt/year LNG import terminal, LNG Limited said. Bear Head was likely
to have signifi- cantly lower development costs and a faster
approval schedule than Magnolia due to work already completed, the
company added. The key assets to be acquired include the 255-acre
site, comprising 180 acres of industrial-zoned land and foundations
in place for two 180,000 cubic meter LNG tanks. The land has been
cleared, most of the site works completed and roads constructed,
LNG Lim- ited said. The company said it has already devel- oped gas
supply and transportation plans, and has interest from several
parties to enter into tolling agreements at Bear Head, like it has
at Magnolia. LNG Limited is in discussions with gas transportation
compa- nies and owners of gas reserves onshore and offshore Canada
and in the US Marcel- lus Shale gas play to supply the Bear Head
LNG project site. Under the proposed timetable, the pur- chase of
Bear Head would close before the end of August this year. The LNG
facility is fore- cast to begin commercial operations in 2019.
Magnolia on track Meanwhile, the companys Magnolia LNG project at
Lake Charles remains on schedule and budget, with financial close
expected in mid-2015. Operations at Magnolia are tar- geted to
start in mid-2018. The Magnolia project is to be developed in two
phases, the first of which would comprise two LNG production
trains, each with a capac- ity of 2 million mt/year, two 160,000
cubic meter storage tanks, and a jetty and ship loading facilities
to accommodate tankers of up to 180,000 cu m. LNG Limited expects
to double capacity to 8 million mt/year in the second development
stage. Magnolia has signed four preliminary tolling agreements for
a total of up to 6.7 million mt/year of LNG with AES Corporation
Group, Brightshore Overseas, Gas Natural Fenosa Group and LNG
Holdings. The project has already received approval from the
Department of Energy to export 4 million mt/year of LNG to coun-
tries which have free trade agreements with the US. LNG Limited has
applied to increase the current approval by another 4 million
mt/year and has sought approval to export 8 million mt/year of LNG
to coun- tries that do not have free trade agree- ments with the
US. Christine Forster TokyoThe Jordan Cove LNG project on the US
West Coast aims to sell at least a quar- ter of its output to Asia,
Don Althoff, presi- dent and CEO of operator Veresen said last week
during a visit to Tokyo. The company hopes to conclude binding
agreements with offtakers this year for all of its initial output
of 6 million mt/year at the planned tolling facility on Oregons
southern coast, Althoff said. We do continue to market the project
throughout Asia and look for really high- quality customers who
could take at least the quarter of the output, he told Platts in an
interview. We are going to look for customers who already have
infrastructures in place and strong credit rating. Althoff declined
to elaborate on whether the prospective customers in Asia included
Japanese companies. All of our customers, especially the ones [with
which] we have signed the heads of agreements, considered their
identity to be important to maintain con- fidentiality, and we
respect that, he said. Althoff told delegates at the Canada Alber-
ta LNG Seminar that Veresen has signed a number of non-binding
heads of agreements with large-scale prospective customers locat-
ed in various Asian countries. The Jordan Cove project, which is
currently wholly owned by Calgary-based Veresen, might make its
prospective offtakers equity part- ners, he added. We are talking
to potential offtakers about equity as well, Althoff said, adding
that the majority of the potential customers had expressed interest
in participating in the project. Veresen plans to conclude binding
con- tracts first and then negotiate for potential ownership shares
afterward, Althoff said. The company is aiming to secure an engi-
neering, procurement and construction con- tractor this fall, he
added. The Jordan Cove export project will be a tolling facility
linked to gas prices, likely to be one or a combination of three
North American benchmarks: Henry Hub, Malin Hub in south- west
Oregon and Albertas AECO. Althoff said the price linkages would be
up to customers risk tolerance and gas posi- tions. All three of
the options are very viable for the Jordan Cove, he said. In
shopping the project to potential customers, Althoff said he
emphasized the expected nine-day shipping voyage from Ore- gon to
Asia, compared with 22 days from the Gulf of Mexico through the
expanded Panama Canal. A few of the US LNG export projects that are
furthest along in the approval pro- cess are on the Gulf coast in
Texas and Loui- siana. We do economics from millions of tons per
annum or delivered costs or MMBtu that differential actually allows
a greenfield facility on the West Coast of the US to compete with
brownfield prices because of the difference in shipping costs,
Althoff said. Veresen is targeting a final investment decision for
Jordan Cove in the first quarter of 2015. Althoff said the company
was evaluat- ing the timeline after it received a sched- ule on
July 16 from the US Federal Energy Regulatory Commission for
receipt of a final environmental impact statement by the end of
February 2015. The latest FERC schedule was a little longer [than]
we planned in the original sched- ule...but we are hopeful that we
go a little quicker than their schedule notice. After issuing the
EIS, FERC will hold a 90-day public comment period before deciding
whether to approve the project and allow it to start construction.
They [FERC] have traditionally beaten that schedule a bit, so we
are hopeful that we can have the approval...[in] late May at the
lat- est, Althoff said. Veresen has received conditional approval
from the US Department of Energy to export LNG from the proposed
Jordan Cove terminal to countries that do not have free trade
agree- ments with the US. Earlier, it had secured a license from
Canadas National Energy Board to export gas to the Oregon terminal.
The Jordan Cove facility in Coos Bay will initially have a capacity
of 6 million mt/year, which can easily expand to 9 million mt/
year, Althoff said. The project, which is scheduled to start
operations in mid-2019, also includes the 370 km (230 mile), 1
Bcf/d Pacific Connector Gas pipeline, owned equally by Veresen and
Williams, and a 420 MW power generation plant. The pipeline would
source gas from the US portion of the Rocky Mountains and from the
Western Canadian Sedimentary Basin. Jordan Cove is regarded as one
of the major projects that would provide an export outlet for
Western Canadas large natural gas resources. Takeo Kumagai Jordan
Cove eyes Asia for 25% of LNG sales Veresen hoping for offtake
deals this year on 6 million mt/year of output
3 Oilgram News / Volume 92 / Number 147 / Tuesday, July 29,
2014 UK launches shale gas exploration bid round LondonThe UK
government has started the long-awaited 14th landward bidding pro-
cess for onshore oil and gas licensesthe first for six yearswith a
view to open- ing up a shale gas production industry that could
relieve the countrys increasing import dependency. Since 2008, much
more has been learned about shale gas and its capacity to transform
energy markets, as has happened in the US. The newly-appointed UK
energy minis- ter Matthew Hancock published on Monday details of
how companies can apply for licenses which will enable them to
start initial exploration. Applications will be accepted up to the
October 28. He said: Unlocking shale gas in Britain has the
potential to provide us with greater energy security, jobs and
growth. We must act carefully, minimizing risks, to explore how
much of our large resource can be recovered to give the UK a new
home-grown source of energy. As one of the cleanest fossil fuels,
shale gas can be a key part of the UKs answer to climate change and
a bridge to a much greener future. As well as a license, a company
needs to make a further drilling application which will then
require planning permission, as well as permits from the
Environment Agency and sign-off from the Health and Safety
Executive. As DECC says in its guidance notes for bidders: The
award of a license does not imply prior consent to actual
activities, and there are other regulatory and legal provisions
that may restrict a licensees ability to carry out its proposed
activities. Some regions such as national parks will be much harder
to win a license for as DECC will also require detailed statements
of environmental awareness to be submitted with license
applications to these areas, and DECC may reject the application if
the state- ment does not demonstrate sufficient aware- ness of the
sites sensitivity. And for companies hoping to tackle coalbed
methanetechnology that is set to transform Australia into a major
gas export- eror vent gas from disused mines, the Coal Authority
must give approval as it man- ages the UKs coal reserves; and a
license from DECC to capture the actual hydrocar- bons is also
needed. All those consents must be in place before the many dozens
of wells may be drilled that experts say will be needed in order to
assess the economics of shale gas production. This is an unknown
quantity in the UK, where the trillions of cubic meters of gas that
the British Geological Survey believes are in place might not be
economically recover- able unless gas prices double. Drilling
though could prove difficult as even when all the paperwork is done
and the work program approved, local protestors can bring activity
to a halt by blocking road access, as has happened at sites in the
UK in the past year or so. Lawyers at Clyde & Co said Monday
that: Despite the rhetoric, there are vari- ous hurdles to overcome
before fracking can even be considered as potentially a serious
proposition in the UK. As things stand, the combination of
intricate procedural hurdles, local politics and unrest amongst
affected third parties makes it unattractive to poten- tial
investors. The DECC announcement however was welcomed by Igas
Energy, a UK com- pany which has ambitions to produce gas onshore.
It said it would participate and was looking forward to continuing
our role in securing Britains energy needs for the future and
de-carbonizing the economy. William Powell BarcelonaPortugals Galp
Energia said Mon- day its refining margin in the second quarter of
2014 turned negative due to a planned outage at the Sines refinery
complex and an adverse refining environment. The company reported a
negative $0.30/ barrel refining margin for the April-June period,
down from a positive margin of $3.40/b in Q2 2013, it said.
Refining performance was impacted by the unbalanced European
market, the com- pany said. Recent refining performance was
worsened by planned maintenance at the Sines refinery, it added.
Galp said crude volumes processed at its refineries fell 22.5% year
on year to 17.3 mil- lion barrels, which cut refined product sales
8.1% year on year to 4.1 million mt. The company operates two
refineries in Portugalthe 220,000 b/d Sines plant and 91,000 b/d
Matosinhos. Sines shut from early March to mid-May for maintenance.
Despite the poor result in the second quarter, Galp said it expects
volumes of crude processed to rise in the third quarter following
the end of planned maintenance at Sines. As a result of the outage,
the hydro- cracking complex registered an utilization rate of 67%,
down from 69% in the first quarter, which was also affected by the
maintenance, the company said. This com- pared to a rate of 95% in
the fourth quarter of 2013. During Q2 2014, medium and heavy crudes
accounted for 79% of the total crude processed in Galps refineries.
Production of middle distillates accounted for 47% of the total, in
line with the year before, whereas gasoline and fuel oil account-
ed for 17% and 20%, respectively, of total production. Brazil
production Looking forward, Galp said in a separate presentation
also released Monday, it expects increased production in Brazil to
push its working interest production higher by around 17% quarter
on quarter to 30,000 b/d of oil equivalent in the third quarter.
Second-quarter working interest increased 9.7% from the year-ago
levels to 25,700 boe/d, as rising output in Brazil offset falling
volumes in Angola amid field maturity. Net entitlement production
from Brazil rose 41% year on year in Q2 to 15,300 boe/dmostly due
to the contribution from FPSO Cidade de Paraty, which accounted for
an average output of 4,400 boe/d, Galp said. The extended well
tests performed in the Lula Central and Iara West-2 areas also
contributed to the increase of production in Brazil, with a total
production of 500 b/d, the company said. Galp said it also expects
the third Brazil- based FPSO, Cidade de Mangaratiba, to start
production in the fourth quarter of this year. In Angola,
meanwhile, Q2 working interest production decreased around 2,200
b/d from the year-ago levels, or 17%, to 10,400 b/d, as production
declined in the Kuito field, in Block 14, after the decommissioning
of the respective FPSO in late 2013. In the gas segment, the
company expects a fall in volumes in the next quarter as it sees
LNG trading opportunities narrowing. Overall, natural gas sold
during Q2 2014 increased 25% year on year to 1.83 Bcm fol- lowing
higher volumes of LNG traded in the international market. The total
traded volume reached 1.01 Bcm, with 12 cargoes traded in the
quarter, up from six the year before. Cargoes traded in the period
were primarily bound for Latin America, and they also went to Asian
markets, the company said. Gas volumes sold for power generation
declined 15% year on year to 120 million cu m, mainly due to higher
imports of electricity generated in Spain. Sales in the industrial
segment reached 616 million cu m, a decrease of 4% from the
year-ago level, as a result of lower demand from Galp Energias own
units, particularly the hydrocracking complex, following the
planned outage at the Sines refinery, and credit restric- tions to
certain clients. Volumes sold in the residential segment decreased
23% year on year to 72 million cu m, as competition intensified in
the Iberian region, Galp said. Gianluca Baratti Galps refining
margin slips into the red Setback for Portuguese refiner in second
quarter Europe, Middle East & Africa
4 Oilgram News / Volume 92 / Number 147 / Tuesday, July 29,
2014 Europe, Middle East & Africa ing terms of the Energy
Charter Treaty, GML would have had a much tougher task to obtain
justice. The court found that the Russian state used the tax
authorities to conduct a full assault on Yukos and its beneficial
owners in order to bankrupt Yukos and appropriate its assets, while
at the same time removing Khodorkovsky from the political arena.
The court arrived at the sum to be paid using the presumed value of
Yukos assets as of June 30 this year, but also applied a discount
based on a number of factors including flaws in Yukos own financial
affairs. The shareholders claim was for $114 billion. The court
also ordered Russia to pay $60 million in legal fees. Russia has a
100-day grace period in which to make its damages payments, before
incurring interest. Hunt for assets The winning side said they
would now go after Russian state commercial assets, potentially
entailing wrangles over how these are defined, but ruled out
obvious sovereign assets such as embassy buildings. We are working
on a strategy, said Osborne. We believe we will have a chance of
col- lecting. We didnt go into this for a Pyrrhic victory to make a
point. We went into it to get compensation for the loss we
suffered. We still believe that we will ultimately collect on this
award. Leonid Nevzlin, a former Yukos co-owner, said GML should use
all legal means avail- able to pursue Russia to fulfill the Hague
court ruling. I think the shareholders should get preparedif Russia
refuses to payto search and freeze the Russian Federations assets
all around the world, Nevzlin told the Echo of Moscow radio
station. In a statement, Khodorkovsky said it was fantastic that
the company shareholders are being given a chance to recover their
damag- es, but regretted that the compensation was to come from the
states coffers rather than from the pockets of those who
orchestrated the deal against Yukos. Khodorkovsky also said he was
not part of the legal proceedings and did not seek to benefit
financially from their outcome. Khodor- kovsky has said he has no
Yukos shares and played no part in the case. Rosneft impact Rosneft
insisted the judgment does not make it vulnerable. And Russian
foreign minis- ter Sergei Lavrov noted that a legal challenge is
still possible in Dutch courts outside the court of arbitration.
The authorities that represent Russia in the lawsuit will
undoubtedly use all legal Yukos shareholders claim $50 billion win
...from page 1 possibilities to defend [Russias] position, he said.
Rosneft said it did not expect the Hague court ruling to affect its
operations as it does not believe that any demands can be made to
it due to the [court] ruling. Rosneft believes that all its
transac- tions to buy former Yukos assets and any other actions
towards Yukos were fully legal and in line with the current
legislation, it said in a statement. Rosneft also said it was not a
party in the Yukos lawsuit and was not a defendant under the
ruling. The state currently owns 69.5% of Ros- neft via its holding
entity Rosneftegaz. Oil major BP is the second biggest shareholder
in the company, owning 19.75%. BP declined to comment Monday.
Russias finance ministry also said it would contest the finding,
reflecting its historical involvement in Yukos tax arrange- ments.
The court demonstrated a one- sided use of evidence leading to
political bias, it said. A key part of Russias argument in court
was that it never actually ratified the Energy Charter Treaty, a
key plank of the complain- ants case, however this was rejected by
the court in a 2009 ruling. Russia also highlighted previous
findings by the European Court of Human Rights that Yukos directors
committed tax evasion. The unprecedented size of the damages
awarded by the arbitration court is puzzling, considering that the
case was brought on the basis of an international treaty which the
Russian Federation has not ratified, and is in direct contradiction
to decisions made by the ECHR, the ministry said. In 2011, the ECHR
made an interim ruling that went partly in Russias favor,
dismissing the key charge that Yukos had been treated differently
from other companies and was the victim of a politically motivated
attack. A number of other cases have been brought, including by
Yukos subsidiary Yukos Capital. In October, a New York court
ordered Rosneft subsidiary Samaraneftegaz to pay $186 million plus
interest to Yukos Capital. The European Court of Human Rights is
expected to make a ruling on a multi-billion dollar claim by Yukos
on Thursday. Nick Coleman, with Dina Khrennikova, Rosemary Griffin
and Nadia Rodova in Moscow UKs JKX eyes more gas from Ukrainian
field LondonUK independent JKX Oil and Gas is looking forward to
more natural gas production from its Elizavetovskoye field in
Ukraine in the second half of this year as its operations remain
unaffected by the ongoing civil unrest in the east of the country.
JKX is one of a handful of foreign gas pro- ducers in Ukraine,
currently still suffering from intense fighting in the east, but
CEO Paul Davies said its operations had been unaf- fected by the
unrest. There is certainly risk in the country, although we are not
seeing interruptions, Davies told Platts Monday. We are importing
goods and the bank- ing is working OK. We are reading about the
growing list of sanctions but this has not yet affected our
business, he said. The Elizavetovskoye field field in the Pol- tava
province in eastern Ukraine began pro- duction in January 2014. The
two production wells both came on stream significantly above
expectations, and have required an early expansion of the
processing facility to 30,000 Mcf/d, the company said. While its
gas production rose in both Rus- sia and Ukraine, its oil and
condensate pro- duction fell. But the collapse of the Ukrainian
currency from Hryvnia 8 to the dollar to Hryv- nia 12 did the most
damage to its earnings, Davies told Platts. We corrected this in
April, he said. Before, forex was fixed for three months but now it
moves monthly. He said the company now receives about $11/Mcf for
its gas, which is among the high- est prices in Europe. There has
been a year on year drop but: We are not complaining, he said. JKX
sells 75% of its Ukrainian output to the Anglo-Dutch major Shell at
a small dis- count to the regulated price and the rest of its
production it sells directly to end-users. Following the
disconnection of Ukraine from Russian gas in mid-June, the govern-
ment did try to persuade the independent producers to halve their
sales to end-users and inject the other half into storage as a
means of preparing the country for winter; but their opposition
blocked this move, Davies said. The amount of gas they produce is
too small to have any material impactindepen- dents produce about
1.5 billion cubic meters/ year, so that plan would only give eight
days of additional storagewhile the industrial sector needs gas, he
said. By his reckoning, Ukraine needs another 3 Bcm or so to inject
to be ready for winter. It now has stored about 14.5 billion cubic
meters. He said the tenders for reverse flow through Slovakia were
fully subscribed and a most interesting way of unlocking capacity
from the west. Meanwhile, the arbitration court in Stock- holm is
hearing the dispute between Rus- sian exporter Gazprom and Ukraine
which Davies thinks could last a few months. William Powell
5 Oilgram News / Volume 92 / Number 147 / Tuesday, July 29,
2014 Algeria appoints new chief at state Sonatrach AlgiersAlgerian
energy minister Youcef Yousfi has appointed an interim head of
Sonatrach to replace the national petroleum companys CEO. Yousfi
named Said Sahnoun as Interim President and Director General of
Sonatrach, replacing former CEO Abdelhamid Zerguine as the groups
top executive, the ministry said in a statement. Sahnoun had been
Sonatrach Vice-Presi- dent Upstream since the beginning of 2010,
and was previously in charge of relations with international oil
companies. On Saturday, a Sonatrach source speaking on condition of
anonymity told Platts that Zer- guine had been relieved of his
duties. Zerguine was appointed CEO in Novem- ber 2011. Earlier, as
an executive director of the state company, he was in charge of
Sonatrachs international activities. The ministrys announcement
preceded, by just a few weeks, the deadline for interna- tional
companies to submit bids for 31 explo- ration blocks on offer in
the countrys fourth oil and gas licensing round. In January this
year, Zerguine said Alge- rias total annual oil and gas production
had fallen 4% in 2013 to 3.81 million b/d of oil equivalent, while
exports fell 7% year on year to 2.01 million boe/d. The latest
Platts survey of OPEC output shows Algeria produced 1.13 million
b/d of crude in June 2014. Algerian oil and gas exploration has
declined in recent years due to international oil company
dissatisfaction with the terms offered for exploration contracts.
The govern- ment reformed its oil and gas law in 2013 in a bid to
lure back international investors. Lies Sahar JerusalemGas
production from Israels two largest offshore fieldsTamar and Levia-
thanis expected to total around 3.6 Bcf/ day by the end of 2017 or
early 2018, accord- ing to the fields operator Noble Energy, with
attention still focused on finding export out- lets for the output.
Current production at the Tamar field is 1 Bcf/d, while commercial
production from Leviathan is expected to start by end-2017.
According to Nobles estimates, production at Tamar will be doubled
to 2 Bcf/d and Levia- than will contribute the remaining 1.6 Bcf/d
in the final quarter of 2017 or in early 2018. The first phase of
developing the Leviathan field is scheduled for completion in the
final quarter of 2017 or the first quarter of 2018. Noble and its
Israeli partners Delek Drill- ing, Avner Oil and Gas and Ratio Oil
Explora- tion have until the end of the year to present Israels
Energy and Water Ministry a detailed plan for developing the
Leviathan fieldIsra- els largest offshore gas field with 22 Tcf of
estimated resources. Noble said the first phase would serve the
domestic and regional exports market, while in the later phases
pipeline capacity could be expanded, a floating LNG platform could
be built or an onshore LNG terminal could be built in Cyprus. The
Leviathan consortium in June this year signed a preliminary deal
with the UKs BG Group for the sale of 7 Bcm/year of gas for 15
years to supply its Egyptian LNG plant at Idku. In January this
year, an agreement was signed with the Palestine Power Generation
Company, or PPGC, for the sale of 4.75 Bcm of gas over 20 years. In
addition, the partners have submitted a bid to supply Cyprus with
0.7 to 0.95 Bcm of gas over a five-eight year period. No Turkey
deal Turkey, however, is not likely to sign a gas import deal with
Israel unless diplomatic relations between the two countries
improve, according to a report by Israels Institute of National
Security Studies published Sunday. Turkey is seen as a key
potential export market for Israeli gas and earlier this year
Turkish energy group Turcas confirmed it was in talks for long-term
gas supply from Israel. However Sundays report by Oded Eran, a
former Israeli ambassador to Jordan, and Dan Vardi, former CEO of
Israel Natural Gas Lines, said that an agreement resolving
outstand- ing disputes between Israel and Turkey is a necessary
condition for an agreement on gas exports to Turkey. The report was
issued as relations between the countries soured further over the
conflict between Israel and Hamas. Turk- ish Prime Minister Recep
Tayyip Erdogan has vehemently criticized Israels military opera-
tion in the Gaza Strip. Their once close relations deteriorated
sharply after an Israeli commando raid in May 2010 on a Turkish
ship Mavi Marmara that was attempting to break Israels naval block-
ade of the Gaza Strip. A settlement of the dispute has been in the
works for some time but the latest violence in Gaza has sidelined
efforts to improve ties. The INSS report said the potential for gas
exports to Turkey would depend on the settling of outstanding
political differences, citing the sale of Egyptian gas to Israel
that was preceded by a government-to-government agreement. Egyptian
gas exports to Israel were subsequently halted after the overthrow
of President Hosni Mubarak in 2011. However the authors were
pessimistic about any short-term improvement in relations as the
tension between Israel and the Pales- tinians is likely to
continue. The two countries are also at odds over Israeli
cooperation with Cyprus on energy issues. Cyprus and Turkey have
their own dispute over the maritime boundaries of the island and
the Cypriot governments authority to make unilateral decisions on
gas explora- tion and revenue. Turkey occupied one third of the
island in 1974. Turcas Petrol in April said its gas unit was in
talks with Enerjisa, which is jointly owned by Turkeys Sabanci
Holding and German utility E.ON, to buy natural gas from Israels
Levia- than field for domestic Turkish customers. Gas
infrastructure While export options remain on the table, the
Israeli government has also now given its long-awaited final
approval for the develop- ment of gas receiving terminals, Israels
Inte- rior Ministry said Sunday. Israel is currently served by a
sole gas pipeline from the Tamar field, which delivers gas to a
receiving terminal at Ashdod, and the approval by the Ministerial
Interior Committee to build new terminals will enable the expan-
sion of domestic gas consumption in coming years, the ministry
said. The latest approval follows that in June by the countrys
National Planning Commission of the master plan that includes two
offshore receiving stations and two small onshore facilities that
will link to the countrys trans- mission network. The ministry said
one onshore facility will be located between Dor and Or Akiva and
will include a treatment facility near the Hagit power plant, while
the other will be located 10 kilometers (6 miles) to the south
between Beit Yannai and Netanya and will connect to a treatment
facility at the Meretz sewage treatment plant. The Energy and Water
Ministrys Natural Gas Authority has said the two sites will be able
to handle 4 million cubic meters/hour. The new infrastructure is
not likely to be ready until 2017 at the earliest and will serve
Tamar and Leviathan. Environmental organizations and residents have
protested land-based gas terminals and called for all treatment be
done offshore. It was not immediately clear if they will chal-
lenge the latest approval in court. New infrastructure is needed as
Israel currently relies on a sole pipeline and receiving terminal
with a capacity of 40,000 MMBtu/hour. An expansion to 50,000
MMBtu/hour is due for completion next year at a cost of $216
million, and a second expansion to 60,000 MMBtu/hour, which
involves turning the depleted Mary B field into a storage facil-
ity, in 2016. Neal Sandler Israeli gas output to hit 3.6 Bcf/d by
2017 As export options still remain on the table Europe, Middle
East & Africa
6 Oilgram News / Volume 92 / Number 147 / Tuesday, July 29,
2014 US refiners should rethink export stance: Murkowski
PittsburghAlthough the recent US Depart- ment of Commerce ruling
that processed condensate can be exported under existing law is not
a game changer, it is a step in the right direction toward
liberalizing crude exports, the senior Republican on the Senate
Energy and Natural Resources Committee said Sunday. Senator Lisa
Murkowski of Alaskawho has called for the US to lift its ban on
crude oil exports and pressed Commerce earlier this month to drop
condensate from its defi- nition of crude oilsaid it is time to
revisit the possibility of lifting the ban because of the changing
energy landscape throughout the world. The United States is the
only country in the world that has a full ban on export of our
crude oil, she said in an interview on Platts Energy Week, which
aired Sunday. Even those nations that are net importers, whether
its the United Kingdom or New Zealand or some of our other friends
and allies that are importers, they dont have a full-on ban. Thats
old energy architecture. Its time we revisit this. And thats what
Ive been pushing. The US still views itself as an importer of
crude, Murkowski said, despite increasing crude oil production in
areas like North Dako- tas Bakken and Texas Eagle Ford. Many of us
can remember a time in the mid-70s when there were lines in front
of the filling stations, she said. Weve always viewed ourselves as
an importer. And our reli- ance on others for this resource has
been something that rattles us from a national security
perspective, from an energy security perspective. And so weve got
this mindset of operating from energy scarcity. Well, the energy
world has changed so dramatically in the past decade, Murkowski
added. Its the technology that is now allow- ing us to access it in
an affordable and envi- ronmentally responsible way. Murkowski
released a report earlier this month that said six federal agencies
put condensate in a separate category from crude, while Commerce
designates it as crude oil, which largely bars it from being
exported. Murkowski said she discussed how condensate is defined by
Commerce in a recent conversation with Commerce Secre- tary Penny
Pritzker. She didnt give any indication that theres going to be a
breakthroughthat theyre going to be moving forward on...lifting of
the export bannothing of this sort, Murkowski said of the
conversation with Pritzker. But again, talking about where they
were with the approv- al of these two permits that would allow for
exports of condensates, again, I think, [sends] a signal that
within the Commerce Department...there is consideration of what
might be done incrementallynot moving as fast as I would like, but
moving. Tough on refiners Under a recent Commerce ruling, pro-
cessed condensate would be eligible for export without a license
because it would be considered a petroleum product and thus not
subject to crude export restrictions. Obama administration
officials have stressed, how- ever, that this is not a shift in
policy. Murkowski said opponents of lifting the ban on crude oil
exports need to consider not what is best for the bottom line of
refiners, but what is best for the overall US economy. So for the
refiners, theyre looking in, and saying, well this puts us in a
pretty envi- able position, she said. We can just take as much as
we possibly can and we can reap that benefit...In the meantime,
youve got a slowdown. Youve got a choke point. Because what you
have in terms of production thats coming up from the ground and
ready to go to the refinery, doesnt have the place to move...So I
dont think that we should look at this from a parochial
perspective. Platts Energy Week airs on Sundays in Washington on
WUSA, a CBS affiliate, and in Houston on KUHT, a PBS affiliate, as
well as on other PBS stations in the US. The program is also
available on the web at www.plattstv. com. Annie Siebert has not
yet been revealed, but noted the port of Galveston, at the juncture
of the Gulf of Mexico and the Houston Ship Channel, serves three
Texas City refineries: two owned by Marathon and one by Valero. A
Marathon spokeswoman said the com- pany does not comment on
operational specif- ics. Bill Day, a Valero spokesman, also said he
would not comment on specific cargoes of crude oil. I can say that
some Valero refineries have processed oil from Iraq, he said. At a
press briefing, State Department Iraq threatens to sue if Kurdish
oil delivered to US ...from page 1 The Americas spokeswoman Jen
Psaki reiterated the US stance that all sales of oil from Iraqi
territory should go through the Iraqi central government. Our
policy hasnt changed, Psaki said. The US, however, has stopped
short of saying they would block any sales of Kurdish crude, which
Baghdad says are illegal. If United Kalavrvta offloads its cargo,
it will not be the first volume of independent Kurdish crude to
make its way to the US Gulf Coast. Several smaller cargoes of
Kurdish oilheavy Shaikan trucked into and loaded out of the Turkish
port of Dortyolhave already landed in the region. The United
Kalavrvta is carrying the last of four confirmed cargoes of Kurdish
crude sent to Ceyhan via the Iraq-Turkey export pipeline. The
United Kalavrvta left Turkey on June 23, moving to the ship-to-ship
transfer area off the coast of Malta before heading west past
Gibraltar earlier this month. Only one of the four confirmed
cargoes of Kurdish oil has so far offloaded, into stor- age at the
Israeli port of Ashkelon, accord- ing to sources. The United
Leadership, which loaded the first cargo from Ceyhan in late May,
has been off the coast of Morocco for nearly two months after being
turned away from Moham- media, sources said. The United Emblem,
car- rying the third cargo, is currently heading east through the
Singapore Strait, also according to Platts ship-tracking program
c-Flow. It remains unclear if any of the four car- goes have found
final buyers. Even the fate of the offloaded Ashkelon cargo is
unclear. The Kurdistan Regional Gov- ernment has denied that it
sold the crude to Israel and end-users in Israel have denied that
they have purchased it. The four cargoes of pipeline oil have
reportedly carried some 4.2 million mt of crude out of Ceyhan.
According to Turkish energy minister Taner Yildiz, as of July 17,
6.2 million barrels of the medium sour Kurdish Blend Test crude
have flowed from the semi-autonomous region of Kurdish Northern
Iraq to Ceyhan through the Iraq-Turkey export pipeline since
late-December 2013. Exports of Kirkuk have been halted since
militants sabotaged part of the Iraq-Turkey pipeline in early
March. The KRG linked a separate pipeline into the Iraq-Turkey
route late last year. It has been using the smaller of the two
parallel lines to send its crude directly to Ceyhan. Market sources
said current pipeline flows were averaging below 120,000 b/d. I
have not heard of any more vessels loading, but I understand that
they have been pumping, a crude trader said. Staff Reports Its free
to conduct the light- ering, [but] nothing has taken place yet. US
Coast Guard ITS AGAINST THE LAW PLATTS OILGRAM NEWS is copyrighted
under US and international laws. Reproduc- ing, duplicating,
photocopying, telefaxing or inputting it into a computer, is an
infringe- ment of copyright punishable by law.
7 Oilgram News / Volume 92 / Number 147 / Tuesday, July 29,
2014 Tesoros Uinta Express pipe runs into zoning snag New
YorkTesoros plan to increase the amount of indigenous Utah waxy
crude oil transported by pipeline to Salt Lake City area
refineries, including its own 58,000 b/d Salt Lake City facility,
has hit a snag due to newly- introduced local zoning ordinances.
The 135-mile Uinta Express pipeline would run through Summit
County, Utah, where three separate ordinances filed in June impose
restrictions on land use, including a six-month restriction on the
placement of hazardous liq- uids pipelines in the county. The
Summit County Councils June 25 actions came unexpectedly as we have
been in consistent and ongoing communications with the county over
the location of the Uinta Express Pipeline for the past several
months, Tesoro spokeswoman Tina Barbee said in an email Monday. The
proposed Uinta Express pipeline would carry about 60,000 b/d of
cheaper local crude to regional refineries. Including Tesoros
facil- ity, there are five refineries with a total refining
capacity of 173,050 b/d, according to US Energy Information
Administration data. The pipeline would take about 250 tanker
trucks off the road that are currently making round-trips from the
Uinta Basin to Salt Lake City, the company said. In order to follow
the proper process, as both state and local laws mandate, any chal-
lenge to the councils action must be filed within 30 days, we are
filing our compliant with the court of jurisdiction. Our complaint
is based on our belief that the ordinances are both legally
impermissible and practically unworkable, Barbee said. Utah
produced 3.282 million barrels in April 2014, or about 111,000 b/d,
according to EIA data. During April, Utah crude was sold at an
average price of $86.38/barrel, even cheaper than other
price-advantaged crudes. Platts data shows that another northern
Midcontinent crude, Bakken ex-Guernsey, Wyo- ming, sold at an
average of $99.72/b in April. Uinta Basin crude is very paraffinic,
mak- ing it good for feedstock lube plants and as the direct feed
for some fluid catalytic crack- ing units. The sulfur content is
about 0.01% and. Black Waxy crude has an API of 29-35 while Yellow
Waxy crude has an API of 40-45. Although Tesoro was not provided
notice of the Summit County Councils intentions to dis- cuss and
enact Ordinances 825-827, we believe it is important for us and the
county to continue to work through solutions together, Barbee said.
Tesoros Salt Lake City refinery currently receives 17,000 b/d of
waxy crude via anoth- er pipeline owned by Tesoro and dedicated to
the refinery. Volumes on that line will increase to between 22,000
b/d and 24,000 b/d in the second quarter of 2015 when the second
phase of an expansion project is completed. Janet McGurty
BogotaReacting to a recent worsening of security in Colombias
southernmost oil pro- ducing region, defense minister Juan Carlos
Pinzon on Saturday said he would send 700 special forces soldiers
plus additional marine and police units to Putumayo province to try
to restore order. The move comes as the province border- ing
Colombias southern frontier with Ecuador is beset with pipeline
bombings, attacks by suspected leftist rebels on tanker trucks
haul- ing crude and murders in the past several weeks that have
brought oil production from some fields to a standstill. The unrest
in Putumayo and ongoing rebel attacks on the Cano Limon and
Bicentennial pipelines in northeast Colombia were also likely
factors in disappointing results in the first phase of the Colombia
2014 Bid Round last week, in which just 27% of blocks on offer
received bids. The attacks have also cut into Colombian crude
productionand thus royalties and taxes that the government was
counting on to meet 2014 fiscal goals. That has forced finance
ministry officials to step up their cam- paign for changes in the
tax code to increase government revenues. So far in July, suspected
guerrillas have forced at least 30 tanker truck drivers to dump
their loads of crudetotaling up to 250 barrels per truckon rural
roads. The crude has created an environmen- tal disaster, polluting
nearby streams that some farm communities depend on for drinking
water, said Bogota-based consul- tant Orlando Hernandez. On July
23, one of the drivers of a truck hauling crude was killed for
failing to respond to rebel demands, according to local news
reports. In addition to the attacks, residents of the rural Puerto
Vega Teteye community have blocked entry into a Vetra Group oil
field since July 10 to protest a government deci- sion to award a
permit to the company to carry out exploratory drilling in the
region, said Hernandez. Counter-insurgency plans After meeting
Saturday with community officials and oil company personnel in
Puerto Asis, the capital of Putumayo province, Pinzon said he would
deploy two helicopter- borne special operations army battalions
numbering 700 soldiersto the zone in the next month. Pinzon also
said he would send addi- tional marine units, including two
additional hovercraft to patrol the San Miguel River, doubling the
number of hybrid vehicles in the area capable of moving on land and
water. A special squadron of riot police will also be stationed
permanently in Puerto Asis, the minister said. In addition, special
intelligence and judi- cial units will be transferred to Puerto
Asis to infiltrate, investigate, capture and try alleged insurgent
supporters that are members of terrorism support networks, known by
their Spanish initials as RATS, and who supply information to the
rebels, he said. In April, after rebels launched a wave of attacks
on the Transandino Pipeline that crosses Putumayo province, Pinzon
ordered two special forces battalions to the region and said the
defense ministry would step up flights of drone aircraft monitoring
the pipe- lines path. Chris Kraul Colombia to send more troops to
oil region In an effort to quell attacks oil infrastructure, get
production on track Argentina crude imports steady in June, gas up
2.7% Buenos AiresArgentina increased natural gas imports by 2.7% in
June compared with the year-earlier level while imports of crude
were steady. Gas imports rose to 42.6 million cubic meters/day in
June, or 34% of the 126 mil- lion cu m/d average consumption, from
41.5 million cu m/d in the year-earlier period, the Energy
Secretariat said Monday in a monthly data report. The gas imports
were up 17% compared with 36.4 million cu m/d this past May,
according to the data. Argentina imports gas by pipeline from
Bolivia and in its liquefied form from global suppliers. Bolivian
gas imports totaled 17.4 million cu m/d in June compared with 16.7
million cu m/d in June 2013 and 17.5 million cu m/d in May.
Argentina also plans to ramp up Bolivian gas imports to 27.7
million cu m/d in 2017 as more pipeline capacity comes online. LNG
imports averaged the equivalent of 25.1 million cu m/d in send-out
capacity in June, up from 24.8 million cu m/d in the year- earlier
period and down from 18.9 million cu m/d in May, the report showed.
The Energy Secretariat said in the report that crude imports
averaged 25,363 b/d in June, the same as in May. The report did not
provide year-earlier data. Argentina hadnt imported crude for years
until 2012 when it had to turn to overseas suppliers to make up for
dwindling domestic production. Crude production fell 36% to 540,000
b/d in 2013 from a record 847,000 b/d in 1998, according to the
Argentine Oil and Gas Institute, an industry group. Charles Newbery
Markets & Data
8 Oilgram News / Volume 92 / Number 147 / Tuesday, July 29,
2014 To reach Platts E-mail:[email protected] North America
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Advertisement Sales Kacey Comstock New YorkICE September Brent
crude futures fell 82 cents to settle at $107.57/b Monday despite
an escalation of fighting near the air- port in the Libyan capital
of Tripoli. NYMEX September crude finished 42 cents lower, settling
at $101.67/b. A bearish refined products market weighed on prompt
Brent, but further falls were likely arrested amid ongoing battles
not only in Libya, but also in Ukraine, Iraq and Gaza, analysts
said. NYMEX August ULSD futures settled 2.78 cents lower at
$2.8879/gal and August RBOB fell 1.61 cents to settle at
$2.8492/gal. Two fuel tanks caught fire during fighting around
Tripolis airport, AFP reported. The situation is very dangerous
after a second fire broke out at another petroleum depot, the
government said, warning of a disaster with unforeseeable
consequences, according to AFP. But Price Futures Group energy
analyst Phil Flynn pointed to the comparative stability of the US
refining market, where runs have been running just below record
levels. What we are seeing is the benefit of US shale oil starting
to take hold, Flynn said. Abundant supply of cheap, high yielding
oil is allowing producers to produce [gasoline] at a record pace.
This has provided a buffer to a price shock that might have
occurred with all of the geopolitical issues the world has had to
deal with. Analysts surveyed Monday by Platts expect refinery runs
to remain strong and con- tinue to boost product stocks. NYMEX
products failed to rally even after reports Sunday that a fluid
catalytic cracker at ExxonMobils 365,000 b/d Beaumont, Texas,
refinery experienced an upset. The company acknowledged there could
be some impact to production. By the end of the day we basically
bounced, Tradition Energy analyst Gene McGillian said. If it wasnt
for Libya, Israel, Iraq, Ukraine...the fundamentals suggest the
market should be weaker than it is. The Libya fighting showed
bringing its oil back to the market wont be easy. Unless we see
some resolution the market will have trouble breaking through the
$99-$100/b level, he said. This is largely evident in technical
indica- tors for NYMEX crude. The front-month con- tract recently
broke below the 30- and 100- day moving averages, and is testing
support at the 200-day moving average of $99.84/b. That said, crude
is drifting towards the bottom end of the Bollinger spectrum, which
would indicate the contract is nearing being considered oversold.
And prompt NYMEX crude is likely garnering some support from
tightness at the contracts delivery hub at Cushing, Oklahoma. US
refiners advantaged Despite an expected crude draw this week, total
US crude stocks at just over 371 million barrels are still sitting
more than 3% above the EIA five-year average. Since the US is the
country that is mak- ing the most money on refining and the most
secure with our supply, we need to keep run- ning high to keep
enough in the coffers in case theres a run on [supply elsewhere],
Oil Outlooks President Carl Larry said. Platts refining margin data
backs largely backs this up. The US Gulf Coast crack- ing margins
for Louisiana Light Sweet was assessed at $12.28/b Friday. In
contrast, the Northwest European cracking margin for Brent was
assessed at $2.91/b Friday. Platts margins reflect the difference
between a crudes netback and its spot price. Netbacks are based on
crude yields, which are calculated by applying Platts product price
assessments to yield formulas designed by Turner, Mason & Co.
Product stocks expected to build US gasoline stocks are expected to
con- tinue to grow, with analysts surveyed looking for a 1.1
million-barrel build. Distillate stocks are expected to have grown
1.4 million bar- rels last week. Oil Outlooks Carl Larry is looking
for a 2 million-barrel build in gasoline stocks. Im not really
going to say that [gasoline] demand is easing [but] were getting
plenty of supply playing catch-up after nearly two months of
running production (including blend- ing) over 10 million b/d, he
said. When you produce at a record one would expect more supply.
James Bambino ICE Brent lower amid bearish refined products Markets
& Data NYMEX crude settle, first month NYMEX natural gas
settle, first month ($/bbl) ($/MMBtu) 101 102 103 104 105 104.42
103.12 102.07 102.09 101.67 28-Jul25-Jul24-Jul23-Jul22-Jul July 28
settle: $101.67, down $0.42 3.7 3.8 3.9 3.772 3.762 3.847 3.781
3.747 28-Jul25-Jul24-Jul23-Jul22-Jul July 28 settle: $3.747, down
$0.034 What crude & natural gas markets are doing...
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contact: Lorne Grout tel: 781-430-2112 [email protected] For
media inquiries, contact: Christine Benners tel: 781-430-2104
[email protected] Registration Code: PC432NLI 9th Annual
PIPELINE DEVELOPMENT & EXPANSION CONFERENCEProduction Outlook
and Price Assessments, Changing Flow Patterns, and New Planned
Infrastructure September 2223, 2014 Hilton Post Oak Hotel Houston,
Texas