Market Report: NNPC Discusses Collaboration with Liberian National Oil Company

The weekly Market Report is provided by Gladius Commodities of Lagos, Nigeria. Download the full report here. Learn more about Gladius Commodities at www.gladiuscommodities.com. 

NIGERIA

Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) Alhaji Mele Kyari received a delegation from the National Oil Company of Liberia (NOCAL), led by the President and CEO of the Corporation, Saifuah-Mai Gray. Both national oil companies’ representatives discussed the possibilities of collaboration between the two organizations in supporting NOCAL in capacity development and leveraging NNPC’s expertise across the entire oil and gas value chain. The NNPC will play a vital role in helping NOCAL develop its potential in the oil and gas sector, with Nigerian company Gladius Commodities Limited playing a key role in the engagement.

Minister of State for Petroleum Resources H.E. Timipre Sylva justified the approval of $1.5 billion proposed for the rehabilitation of the Port Harcourt refinery. He stated that the intended rehabilitation will bring the refinery to at least 90% of former production levels in 18 months.

After the rehabilitation, the NNPC will neither operate nor manage the refinery; it will be done by private sector stakeholders. Minister Sylva stated that the entire sum needed for the rehabilitation will not be on loan. The NNPC will use internally generated revenue, contributions from the Nigerian Petroleum Development Company Ltd and federal appropriation for financing the rehabilitation. Only a tiny fraction will come from the African Export-Import Bank.

GHANA

Bureau Veritas – a testing, inspection and certification body – has completed the classification of the Torman Liquefied Natural Gas (LNG) Floating Regasification Unit (FRU) at Tema port, Ghana in sheltered waters.

The unit is combined with a Floating Storage Unit to deliver gas to onshore consumers. The volume that Ghana National Petroleum Corporation will be taking is equivalent to circa 1,300 MW of combined cycle power plant capacity. The 95m-long, newly built FRU was constructed at CSSC Jiangnan Shipyard in China and fitted with two IMO type-C tanks, with a storage capacity of 28,000 cubic meters.

The LNG FRU is designed for a regasification capacity of around 1.7 million tons of LNG per year and will be in operation for approximately 20 years. The classification and certification scope, conducted by Bureau Veritas included the design, review, approval, material certification and construction surveys of the LNG FRU at Jiangnan shipyard, as well as Tema port.

Additionally, Bureau Veritas Solutions Marine & Offshore ensured verification and surveys associated with the design, fabrication and incorporation of the natural gas send-out heater skid system onto the Torman LNG FRU. During the unit’s service years, Bureau Veritas will be supporting Gasfin’s management, reassuring stakeholders of the structural soundness of the unit and its safety, through regular conformity checks to Bureau Veritas’ classification rules and international standards.

GLOBAL

On March 25, oil prices fell as a new round of COVID-19 restrictions in Europe revived worries about demand for oil products, even as tugboats struggled to move a stranded container ship blocking crude oil carriers in the Suez Canal.

The U.S. West Texas Intermediate crude futures traded 2.9% lower at $59.39 a barrel, while Brent crude futures fell 2.5% to $62.82. The U.S. Energy Information Administration’s weekly report for March 24 showed a rise in crude inventories by 1.9 million barrels for the week ending March 19, suggesting demand is taking time to return even as the country reopens.

The blockage of the world’s most important waterway and the U.S. supply data was overshadowed by worries over the rising COVID-19 and fuel demand. The Suez Canal Authority said it had suspended traffic temporarily while eight tugs worked to free the stranded container ship that had run aground, blocking the canal, one of the world’s most important oil shipping routes.

A few days of delays in crude or product travelling through the Suez Canal to Europe and the United States is unlikely to have a prolonged impact on prices. In the physical market, Chinese independent refiners have slowed imports in the second quarter, taking cheaper oil from storage, resulting in traders cutting prices for spot cargoes for delivery to Asia. Given the persistent demand worries and falling prices, expectations are growing that the Organization of the Petroleum Exporting Countries and allies will rollover their current supply curbs into May at a meeting scheduled for April 1.

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