Home' Trinidad and Tobago Guardian : June 15th 2017 Contents JUNE 15 • 2017 guardian.co.tt BUSINESS GUARDIAN
ENERGY | BG9
in St Eustatius
oil company PDVSA
is moving millions of
barrels of oil from a
Bahamas storage fa-
cility after terminat-
ing a contract with the owner, US Buck-
eye Partners LP, according to internal
data and sources close to the decision.
Buckeye and PDVSA had tried to re-
solve payment delays and other frequent
problems that stalled some shipments,
the sources said. But PDVSA decided to
shift its oil to the Statia terminal, op-
erated by US NuStar Energy LP, in the
neighbouring island of St. Eustatius.
The termination is another sign of
how PDVSA's deteriorating financ-
es have strained its relationship with
business partners. The state-owned
company has struggled to maintain its
tanker fleet on the water and to keep
operations running to maximise income
for the country's most important ex-
PDVSA's contract with Buckeye had
included storage for up to six million
barrels of crude and fuel oil. The con-
tract was due to expire in December,
but PDVSA decided to end the lease in
advance and seek some US$10 million
in overpayments, according to a source
from the Venezuelan company.
Buckeye and PDVSA did not respond
to requests for comment. NuStar said it
would not discuss customer activities
at its terminals.
Since 2016 Buckeye had intermittent-
ly suspended PDVSA from moving its
stored oil out of the terminal---the Car-
ibbean's largest---over monthly payment
delays, according to sources from the
companies and Thomson Reuters Trade
In late August, PDVSA renewed a
2014 contract with NuStar to secure
its presence in Statia for three more
years starting in March. The state-run
company is now paying some US$2.3
million per month to lease five million
barrels of crude storage excluding extra
charges, according to a document seen
PDVSA's supply and trade depart-
ment last year also approved an op-
tion to lease a single buoy mooring in
St Eustatius and extra storage capacity
for up to 4.3 million barrels of refined
"We are now consolidating blending
and storage operations in St. Eustatius,"
the PDVSA source said.
NuStar's Statia terminal has capac-
ity to store up to 13.03 million barrels
of crude and products. It also has six
mooring locations, blending and trans-
In 2011, PDVSA announced a plan to
increase storage capacity nearly fourfold
in three years to handle new produc-
tion of blends made from the Orinoco
Belt's crudes. Since then, it has rented
facilities in the Caribbean, but payment
problems have recently affected its op-
erations in several islands.
PDVSA operates the 335,000-bar-
rel-per-day Isla refinery in Curacao
and an adjacent terminal. It also owns
the BOPEC storage terminal in Bonaire,
leases the Aruba refinery and its termi-
nal through its subsidiary Citgo, and has
stakes in refineries in the Dominican
Republic, Jamaica and Cuba.
Buckeye's Bahamas terminal was
owned by PDVSA until 2008, when it
was sold to investment firm First Re-
serve Corp. In 2010, Buckeye bought 80
percent of the facility, which can store
up to 26.2 million barrels of oil.
Buckeye also owns terminals in St
Lucia and Puerto Rico.
BP: Global energy demand
stumbles for third year
Global energy demand
continued its slug-
gish rise last year as
growth in Chinese
consumption fell to
its lowest in nearly two decades,
while renewables flourished, BP
said in a report on Tuesday.
Slower demand growth helped
stall the acceleration of greenhouse
gas emissions for a third year to lev-
els not seen since the 1980s, but
emissions remained well above tar-
gets set out globally under the 2015
Paris accord on climate change.
Coal's share in the energy mix
declined to its lowest since 2004 at
around 28 per cent, while produc-
tion of the highly polluting fossil
fuel saw its largest ever annual drop
at 6.2 per cent, BP said.
Global energy demand grew by
1 per cent in 2016, a rate similar to
those seen in the previous two years
but well below the 10-year average
of 1.8 percent, the British compa-
ny said in its benchmark Statistical
Review of World Energy.
"This is a third year where we've
seen weak growth in world energy
demand ... The new normal is that
all of this growth is coming from
developing economies," particular-
ly China and India, BP chief econ-
omist Spencer Dale told reporters.
China's energy demand growth
in 2015 and 2016, 1.2 and 1.3 per
cent respectively, although still the
strongest in the world, marked its
lowest over a two-year period since
While that slowdown resulted
from sluggish global econom-
ic activity, it also stemmed from
greater efficiency in engines and
factories, he said.
Among fossil fuels, oil demand
grew at the fastest annual rate---1.6
per cent---last year as low crude
prices boosted consumption.
Oil production grew by half a
percent, or 400,000 barrels per
day, the lowest gain since 2009,
as energy companies slashed
US shale, or tight, oil produc-
tion fell dramatically last year but
has rebounded strongly in recent
months as oil prices rose, a factor
the market should get used to, Dale
"US tight oil is like a Weeble: It
falls off but then it bounces back
up again," Dale said. "Any sense
of trying to kill tight oil makes no
As oil demand growth contin-
ues to outstrip production growth,
global oil stocks---which have
plagued the market since 2014---
will start falling "more materially"
in the second half of this year, Dale
Gas saw similar growth to oil.
Cheaper and abundant gas
supplies in the United States and
China's drive to switch to cleaner
feedstock for its power plants led
to a 1.7 percent drop in demand for
coal, the most pollutant fossil fuel.
Renewables such as solar and
wind power were the fastest-grow-
ing source of energy, rising by 12
per cent and accounting for a third
of the overall growth in demand.
Still, renewables provide only 4
percent of the world's primary en-
ergy. China, meanwhile, overtook
the United States for the first time
as the largest producer of renew-
The slowing growth in energy
demand, the shift to cleaner fuels
and energy efficiency meant car-
bon emissions grew by 0.1 per cent
last year, similar to the prior two
years, making it the lowest three-
year average for emissions growth
"While welcome, it is not yet
clear how much of this break from
the past is structural and will per-
sist. We need to keep up our focus
and efforts on reducing carbon
emissions," BP chief executive Bob
Crude oil, fuel shipping costs
from Qatar set to rise on port ban
The costs to ship fuel and crude oil from Qatar are
expected to rise after the United Arab Emirates banned
vessels that previously called at Qatar from docking at
UAE ports, multiple sources from the oil and shipping
sectors said on Monday.
After Saudi Arabia, the UAE, Egypt and others last week
severed diplomatic and transport links with Qatar after ac-
cusing it of sponsoring terrorism, the UAE blocked vessels
carrying Qatari crude from entering the Emirates' oil ports.
This is disrupting the typical logistics of the oil industry
where buyers take very large crude carriers (VLCC) capa-
ble of carrying 2 million barrels of oil and load up to four
different 500,000-barrel cargoes to save on costs. Buyers
are now splitting cargoes on smaller Suezmax ships that
carry 1 million barrels to load separately in Qatar and the
UAE, the sources said.
Suezmax rates are now expected to rise to between
Worldscale (WS) 75 to 80 on higher demand for these
vessels, said two of the sources. CSSA, the shipping arm
of French oil major Total, South Korean refiner SK Energy
and BP have provisionally booked four Suezmax tankers
to load crude and condensate in Qatar and the UAE in the
second half of June at rates of WS67.5 to WS68.5, shipping
data on Thomson Reuters Eikon showed. Worldscale is a
formula used to calculate freight costs.
"Operations are very messy. Some refiners need to
re-arrange or break their cargoes into Suezmaxes which
are more costly," a Singapore-based trader said.
Companies are also arranging to perform ship-to-ship
transfers of smaller parcels onto VLCCs in the water off
Sohar, Oman, which has stayed neutral in the conflict,
the sources said.
Qatar is one of the smallest oil producers in the Middle
East, but almost all of its just over 600,000 barrels per day
of production heads to Asia. Qatar Petroleum's upstream
oil partners include Total and Occidental Petroleum Corp.
"We all just do not know if this situation will be solved
within the next few days or will drag on for weeks or
months," said Ralph Leszczynski, head of research at
Banchero Costa. Reuters
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