Saudi ULSD Cargo from New Refinery Seen Bypassing Europe for Caribs Storage
A third ultra-low-sulfur diesel cargo from a newly commissioned Saudi refinery is being shipped to a Caribbean storage destination, bypassing Europe.
Two previous cargoes sailed from the SATORP refinery near Jubail to storage in the Caribbean over the past three months, amid market talk the middle distillate was off-spec for Europe, forcing sales into less profitable markets.
The Alpine Aqualina called at Jubail on May 10 to load 80,000 tons (596,000 barrels) of ULSD for refinery joint venture partner Total, and then sailed via the Suez Canal to the Mediterranean Sea. The tanker is now signaling its arrival at St Croix, U.S. Virgin Islands according to the OPIS Tanker Tracker on FleetMon.com.
Any ULSD shipments from Saudi Arabia by SATORP are being closely watched as they are the first to compete directly with the U.S., India and Russia, the biggest suppliers of diesel to the continent.
Teething problems at the SATORP refinery led to speculation the diesel is not meeting Europe standard criteria, forcing sales elsewhere, Energy Aspects, a London-based energy consultancy, said in an April report.
The two previous shipments on the tankers Ohio and SKS Dokka shipped ULSD from Jubail to Caribbean storage areas earlier this year, OPIS Tanker Tracker data shows.
The cargo may be off-spec due to its density or cetane index, or it may have a sulfur issue which can be blended away with American-grade ULSD, a Europe-based broker told OPIS. Sales were then most likely to South America, the broker said Saudi Aramco's SATORP refinery, in which Total holds at 37.5% stake began shipping in 2013's last quarter, and is designed to refine 400,000 b/d of crude, with 216,000 b/d of capacity for ultra-low-sulfur diesel and jet fuel, and around 55,000 b/d for gasoline.
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