March 5, 2018 / 11:15 AM / in 4 months

Woodside to suspend Australia's Vincent oil output for one year from May

SINGAPORE (Reuters) - Woodside Petroleum will suspend production of its Vincent crude oil for a year starting from May as the floating, production, storage and offloading (FPSO) unit for the field undergoes maintenance, two traders that participate in the market said on Monday.

The Ngujima-Yin FPSO will be leaving station from the Vincent field, located offshore of the state of Western Australia, from May for “modifications ahead of forecast Greater Enfield production” from the middle of 2019, a spokeswoman from majority stakeholder and operator Woodside told Reuters in an email.

The spokeswoman did not comment directly on the field’s output during the maintenance period.

The last cargo from the field before the suspension will be exported in May, one of the traders said.

The Vincent project is 60 percent owned by Woodside and 40 percent by Mitsui E&P Australia. Production at the field fell to 17,350 barrels-per-day (bpd) at maximum capacity in the fourth quarter of 2017, compared with 18,644 bpd in the third quarter, the spokeswoman said.

The suspension of Vincent production will likely tighten the supply of high-density, low-sulfur, or so-called heavy-sweet, crude from Australia, though the impact on the Asia-Pacific market may be limited since it has a small pool of buyers, the traders said.

About one 550,000-barrel cargo a month of Vincent is exported and the usual buyers are in Malaysia, the United States and India.

“Vincent crude has always been the hardest to sell among all the heavy (crude) grades as there are limited outlets for it as it’s far too heavy,” said a Singapore-based crude oil trader.

“I don’t see a massive impact but there will be some.”

The Ngujima-Yin FPSO is being refitted as part of Woodside and Mitsui’s $1.9 billion Greater Enfield project that will start producing from three fields near Vincent by the middle of 2019.

Greater Enfield is expected to initially produce more than 40,000 bpd of oil at 100 percent capacity, the Woodside spokeswoman added.

This oil will be processed and stored aboard the Ngujima-Yin FPSO.

Reporting by Jessica Jaganathan and Florence Tan; Editing by Christian Schmollinger

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