March 21, 2018 / 1:21 PM / 3 months ago

Tengizchevroil to double LPG export through Taman port in 2018 - traders

    March 21 (Reuters) - Tengizchevroil (TCO),
Kazakhstan's liquefied petroleum gas (LPG) producer and
exporter, plans to raise propane and butane export
through Russian port Taman in 2018 to 450,000 tonnes
from 240,000 tonnes in 2017, traders said.    
    TCO's shipments of LPG through Taman port will grow
in March to about 40,000 tonnes from 27,000 tonnes in
February, traders said.  
    "TCO's LPG export through Taman port will go up to
40,000 from 20,000 tonnes per month (on average in
2017), with further growth possible," said a source in
the port.
    OTEKO, the owner of Taman transshipment terminal,
declined to comment and there was no response from TCO.
    International oil trader Vitol is responsible for
supplying TCO's LPG via Taman terminal.
        
    TAMAN TAKES LPG FROM ODESSA AND POLAND
    TCO reduced LPG exports from Ukrainian port Odessa
in February to 25,900 tonnes from 34,400 tonnes in
January, rail statistics showed. Supplies will continue
to fall next month, to 12,178 tonnes in March 1-19, with
an average daily fall of 31 percent compared to
February.    
    TCO's LPG shipments to Poland declined last month to
its lowest in recent year to 9,079 tonnes from 15,212
tonnes in January. The slump continued this month with
average daily shipments falling by more than 20 percent
to 4,911 tonnes in March 1-19.  
    TCO's LPG deliveries to other eastern European
countries, Hungary, Romania and Slovakia, declined
heavily by 40 to 50 percent compared with last year. 
    Market sources said that about 20,000 tonnes of LPG
per month, the volume previously sent to Odessa, may be
sent to Taman, partially because of lower logistic
costs. Traders estimate this will save $30-$50 a tonne.
    "Supplies to (eastern) Europe, Odessa and Poland
will be reduced," one market source said.
    "There will be another cut in supplies to Odessa in
April," another market source said.
    Meanwhile, LPG shipments to the Ukrainian domestic
market, which started in the second half of 2017, are
increasing and may soon reach the originally planned
level of 20,000 tonnes per month, traders say. 
    Industry sources said that Vitol may get more
tankers to ship rising LPG supplies. The fleet may be
leased on a long-term basis.
    StealthGas' Eco Ice, a new semi-refrigerated gas
tanker with a capacity of 22,000 cubic metres, is
waiting to be loaded at Taman terminal, shipping agents
data showed. The ship was chartered by Vitol and will be
partially unloaded in a Turkish port. 
    The direction of LPG supplies and their sales terms
will be most likely maintained, traders say. Most of
Vitol's shipments goes to the Turkish market, including
deliveries for the company's subsidiary Petrol Ofisi,
and also to Balkan markets and some Mediterranean
countries.
    "[LPG will be sent to] Turkey, Romania, with some
being sold on spot," a market source said.
    TCO's LPG production rose to 1.382 million tonnes in
2017, up by 2.3 percent from a year earlier, and it
ramped up LPG exports by 3.6 percent to 1.261 million
tonnes.   
    The main export routes for TCO's LPG in the western
direction in 2017 are to Odessa (364,429 tonnes), Poland
(294,575 tonnes), Taman (236,525 tonnes) and Hungary
(125,570).
    TCO also supplies liquefied gas to China with
exports reaching 91,798 tonnes in 2017.
    Vitol started exports of TCO's LPG in October 2016
which it received under an advance contract with
Kazakhstan's state oil and gas company KazMunaiGas, one
of TCO's shareholders, which is looking for new
profitable export routes because of the economic
downturn.
    Shareholders in Tengizchevroil are U.S. Chevron
 (50 percent) and ExxonMobil (25
percent), KazMunaiGas (20 percent) and Lukarco, a
subsidiary of Russia’s Lukoil, (5 percent).

    TABLE – Rail shipments of TCO's LPG in the western
direction (transit through Russia) in 2015-2017, tonnes:
    
  Destination     2015       2016       2017     Jan-Mar
 country/port                                     2018*
 Odessa           508,122    527,529    364,429   72,461
 Poland           463,799    393,767    294,575   29,201
 Taman                  -     54,627    236,525   77,018
 Hungary           98,734     98,946    125,570   16,632
 Romania           77,444     71,626     68,939    8,318
 Slovakia          19,204     29,984     35,087    3,556
 Ukraine                -          -     30,196   29,591
 Finland           11,087      6,276        492        -
 Slovenia               -         64          -        -
 Total          1,178,389  1,182,820  1,155,813  236,776
  
    * - from January 1 to March 19, 2018

 (Reporting by Alla Afanasyeva, Damir Khalmetov. Writing
by Anna Bakhtina)
  
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