Gunvor, Vitol place lowest offers for Pakistan gasoline tender Thu, May 21 06:06 AM EDT SINGAPORE, May 21 (Reuters) - Oil traders Gunvor and Vitol placed the lowest offers for a tender by Pakistan State Oil Co seeking 600,000 tonnes of gasoline for delivery over May to August, industry sources said. Gunvor placed the lowest offer for 10 out of 12 cargoes while Vitol placed the lowest offer for two other cargoes, they said. PSO sought six cargoes of 50,000 tonnes each of 87-octane gasoline for delivery over May 25 to June 30 and six cargoes of 50,000 tonnes each for delivery over July 1 to Aug. 15. Vitol and Gunvor placed the lowest offers for the cargoes loading over May to June at premiums ranging from $98.73 a tonne over Middle East naphtha quotes to $108.70 a tonne, on a free-on-board (FOB) Sohar or Fujairah basis, one of the sources said. Gunvor placed the lowest offers for all six cargoes to be delivered over July to August at premiums ranging from $91.70 a tonne to $99.50 a tonne, the source added. The tender, which closed on May 18, is valid until May 23. Separately, PSO cancelled a gasoil tender seeking 50,000 tonnes of 0.5 percent sulphur gasoil for delivery into Karachi over May 22 to May 24 as only one offer was received, a second source said. The company will evaluate its supply and demand situation and decide if it will re-issue the tender, the source said. Pakistan's oil product requirements are spiking during the summer due to increasing temperatures as use of oil for power generation increases, causing gasoline use in smaller power generators to go up, sources have said. (Reporting by Jessica Jaganathan; Editing by Prateek Chatterjee)

Pakistan finalises $21b LNG deal with Qatar

Egypt says Vitol to supply nine LNG cargoes, in talks with BP Thu, Feb 19 11:10 AM EST CAIRO, Feb 19 (Reuters) - Vitol will supply Egypt with nine LNG cargoes for two years starting June 2015, an Egyptian oil ministry statement said on Thursday. The statement said the ministry was also finalising talks with BP over a deal to supply the country with 21 LNG cargoes. The latest contracts were part of a highly sought-after tender to buy 75 LNG cargoes. (Writing by Yara Bayoumy; Editing by David Holmes) ================== Pakistan finalises $21b LNG deal with Qatar By Zafar Bhutta Published: February 20, 2015 Share this article Print this page Email . The government has not clarified what the pricing formula is, though LNG contracts are typically priced at a 10-15% discount to Brent, the global benchmark of crude oil. PHOTO: FILE ISLAMABAD: In a major breakthrough, Pakistan has managed to secure a $21 billion long-term contract from Qatar to supply liquefied natural gas (LNG) at a highly attractive price, a move that is likely to help alleviate some of the severe, chronic shortages of natural gas in the country. Under the terms of the agreement, Qatar will supply Pakistan with 500 million cubic feet per day (mmcfd) of LNG under a pricing formula that translates to a current price of LNG of $7 per million British thermal units (mmbtu), a price lower than that paid even by Indian importers, who are currently paying close to $9-$10 per mmbtu. The government has not clarified what the pricing formula is, though LNG contracts are typically priced at a 10-15% discount to Brent, the global benchmark of crude oil. The price does not include the cost of shipping the LNG to Karachi, which can be substantial. While the new deal is likely to be a welcome injection of supply into the national gas grid, it will not come close to solving the overall natural gas shortages which have crippled large parts of the economy. Pakistan’s total production of natural gas is currently close to 4,000 mmcfd, while demand is closer to 6,000 mmcfd. The 500 mmcfd from Qatar would, therefore, only fill about a quarter of the current shortfall. The $7 per mmbtu price, while attractive relative to where the overall LNG market stands, is still more expensive than the $5 per mmbtu the government would currently have been paying had the Iran-Pakistan gas pipeline been fully built and operationalised by now. Price differences between LNG imports and pipeline gas are natural: the price of the LNG includes the cost of chilling it down to minus 170 degrees Celsius, whereas pipeline gas does not have that cost. The United States has been pressuring Pakistan to import LNG from Qatar, even though gas from Iran would be cheaper because Washington wants to sustain sanctions pressure against Tehran in order to dissuade it from developing nuclear weapons. Several US and European oil companies also have a presence in the Qatar petroleum and natural gas industry. At a meeting of the Cabinet Committee on Energy on February 12, Prime Minister Nawaz Sharif had been informed that the agreement with Qatar Gas had been finalised and that the price was set at a level lower than the ones paid by other countries in the region. Other countries had also expressed an interest in supplying LNG to Pakistan, but Qatar is the closest large supplier, which would reduce shipping costs significantly. The LNG import terminal at Port Qasim, being constructed by Engro Elengy, a subsidiary of the Engro Corporation, is expected to be completed by March 10, ahead of its March 31 contractual deadline. Two ships carrying 50,000 tons of LNG are expected to then start arriving at Port Qasim each month initially, a pace that would slowly be increased to four ships a month. Meanwhile, the petroleum ministry is negotiating with the industry association of Compressed Natural Gas (CNG) retailers for the sale of the first shipment. Given the precarious finances of the energy sector, particularly with respect to the power sector, the government has tried to create a mechanism that would ensure a smooth flow of payments to LNG suppliers. At current prices, each LNG shipment would cost $30 million, which would be paid directly by the finance ministry to Pakistan State Oil, the importing entity, which would then pay Qatar Gas. The payments the finance ministry makes would be deducted from the subsidy payments it owes to independent power producer (IPPs). The IPPs would be required to provide standby letters of credit of between $20 million and $60 million and an operative letter of credit for one months’ supply of gas utilisation of $10 million to $30 million to PSO. Published in The Express Tribune, February 20th, 2015.

BP to export U.S. crude to Canada, Shell seeks permit

Thu, Oct 11 20:01 PM EDT By David Sheppard and Chris Baltimore NEW YORK/HOUSTON (Reuters) - Oil major BP Plc has secured U.S. government permission to ship U.S. crude oil to Canada, and Royal Dutch Shell has applied for an export license, as rising production in the world's top oil consumer upends global energy flows. A surge in output from shale oil reserves in the Bakken of North Dakota and Eagle Ford of Texas has raised U.S. domestic production to the highest level since 1995. While the United States still imports more than 8 million barrels of crude oil per day, a glut of light, sweet crude oil created by the controversial hydraulic boom could fetch higher prices on international markets. This summer BP Plc received a license to export crude oil to specific Canadian refineries from the Bureau of Industry and Security, a branch of the US Commerce Department, a source familiar with the issue said on Thursday. BP has yet to export any crude oil on that license, the source said. Shell spokeswoman Kayla Macke told Reuters they have also now applied for a license, but would not comment on likely export destinations or the volumes of crude involved. "We have applied to the Department of Commerce to export domestic U.S. crude oil," Macke said, adding that as a global commodity, imports and exports would follow supply and demand. A nearly century-old U.S. law requires companies to get a special license to export crude oil. Until recently, there has been little or no demand for overseas shipments, apart from a trickle of crude from Alaska that has been routinely exported. So far, the export business appears geared toward sending supplies of light, sweet Bakken crude from North Dakota to a clutch of Canadian refiners on the East Coast, which are otherwise dependent on costlier European imports. Those refiners in turn export much of their refined fuel to the United States. Pipeline bottlenecks have pushed prices in the U.S. Midwest to more than $20 below international marker Brent crude, which traded above $115 a barrel on Thursday. Many experts are now watching for signs that companies are pressing for a much more controversial move than shipping oil to Canada: permission to ship crude overseas from the Gulf Coast, allowing traders to sell American oil to importers as far afield as Argentina. BOOMING SUPPLIES The Financial Times first reported the news, saying Swiss-based trading firm Vitol had also applied for a license, citing people familiar with the matter. "Other than routine movement between Canada and the United States, we have not been involved in any crude oil export requests," a Vitol spokesman told Reuters, adding they had been shipping crude to Canada for some time. U.S. oil production has become a fiercely contested issue in the Presidential election race, with gasoline and diesel prices near $4 a gallon. Republican nominee Mitt Romney has promised North American energy independence by 2020 by supporting fracking and opening up parts of the Atlantic Coast for drilling. President Barack Obama wants to cut U.S. oil imports in half over the same time period while promoting an "all-of-the-above" policy that backs renewable energy alongside increased U.S. production of fossil fuels. Government data shows U.S. domestic crude oil production hit 6.6 million barrels per day last week, the highest level since May 1995 due to the rise in fracking. But domestic U.S. refiners, especially on the Gulf Coast, have been upgraded to process cheaper, heavier types of crude from Mexico or Saudi Arabia, and are often ill-suited for refining the lighter crudes from fracking. PRESUMPTION OF APPROVAL By law, the Department of Commerce cannot confirm or deny whether it has received license applications or granted licenses, but companies have been exporting crude oil for several decades. Exports to Canada have a "presumption of approval," a Commerce spokesperson said in an email. U.S. crude oil exports to Canada have been growing slowly and steadily. Shipments reached 77,000 barrels per day (bpd) in July, the second-highest volume on record, according to U.S. government data. It was not clear whether the data also counted crude that was re-imported. Exports to Canada are double what they were five years ago, but are still a tiny drop next to 8 to 9 million barrels the U.S. imports each day, including 3 million bpd from its northern neighbor. Lacking pipeline access to Alberta's oil sands, Canadian refineries in Quebec, Nova Scotia, New Brunswick and Newfoundland are dependent on foreign crude. According to the most recent figures from Canada's National Energy Board, Canada imported almost 650,000 barrels per day in May, 23 percent higher than the prior month but down 5.3 percent from May 2012. While most of the imports come from overseas, U.S. crude can be exported to Canada by rail, barge or pipeline. Indeed, Enbridge Inc's massive Lakehead pipeline system can take Bakken crude to the refining hub at Sarnia, Ontario, while the 300,000 bpd Irving Oil refiner at Saint John, New Brunswick, is taking railcars of Bakken crude to replace more-expensive seaborne supplies. Canadian imports of Bakken crude could rise when Enbridge completes its Eastern Access project that will expand the capacity of its system to handle rising production from North Dakota and the oil sands and reverse an existing pipeline to bring Western crude as far east as Montreal. "I believe the assumption that the Commerce Department works on is that crude oil shipped to Canada comes back to the U.S. as product. It equals out more or less," said Lucian Pugliaresi, president of the Energy Policy Research Foundation in Washington DC. "The working assumption is that if you were to submit an application for a waterbourne export to Brazil or somewhere else, then Commerce might treat that much different." (Additional reporting by Jonathan Leff in New York, Timothy Gardner, Roberta Rampton and Ayesha Rascoe in Washington and Scott Haggett in Calgary; Editing by Bernard Orr)