Opal pipeline complies with order to curb gas flows, reviewing next steps
The Opal gas pipeline in Germany said on Monday it had complied with an order to cut some 40 percent of gas shipments in a case involving Russian supply to Europe and was reviewing its next steps. Opal – which connects to the Russian-designed Nord Stream pipeline to Germany – was last week ordered to curb flows after Europe’s top court overruled an EU decision allowing Russian gas giant Gazprom to ship more gas via the pipeline. “OPAL Gastransport (OGT) currently reviews all further steps. Please understand that there is no further comment possible at this point in time,” a note on the Kassel-based operating company’s website said. Gas market participants are watching cuts on Opal, the onshore link for supplies from the Nord Stream 1 pipeline under the Baltic Sea, to assess how much gas from other sources, such as liquefied natural gas (LNG), may be needed to replace them. Germany’s energy regulator, the Bundesnetzagentur, on Friday required OGT to stop auctioning 15.9 million kilowatt-hours (kWh) per hour, which OGT started doing Saturday. That came after the European Court of Justice halved previously allowed volumes after Poland successfully argued that its supply security is infringed by Russia diverting huge volumes directly into Germany. “(OGT) is not able to specify the consequences on the market,” the statement from Opal, which is controlled by Gazprom and Wintershall DEA. It also said the court ruling was between the EU and member states so Opal as a company could not challenge it and that it did not know whether its owners were considering challenging it. Refinitiv Eikon data showed that gas flows into Greifswald, near the landing point of Nord Stream 1, at 1200 GMT were down 19 percent from the level at the same time last Friday, before the cuts, standing at 859 gigawatt-hours (GWh). Flows on Nel, a second pipeline connected to Nord Stream 1 which feeds north Germany and huge underground storage facilities, were up by 11 percent at 777 GWh.
No effect on oil supply in India following attacks on Aramco centres: Pradhan
Petroleum minister Dharmendra Pradhan on Tuesday expressed confidence that there will be no effect on oil distribution and supply in the country following attacks on the oil stabilization centres of Saudi oil giant Aramco. “It is unfortunate that the oil stabilization centres of Aramco have been attacked. Following the attacks, top executives of Aramco have been contacted. Indian ambassador in Riyadh contacted the senior management of Aramco to ensure a steady supply to India,” Pradhan said. “We have reviewed our overall crude oil supplies for the month of September with our oil marketing companies (OMCs). We are confident there would be no supply disruption to India. We are closely monitoring the evolving situation,” he added. Pradhan further said that Aramco officials have ensured that there will be no impact on distribution. “September offtake of oil has been completed. We will have to wait to see what actual impact it will have on Indian markets. For continued supply we have kept all options open,” he said.
Saudi Aramco offers alternative crude oil grade to Indian Oil Corp
Saudi Aramco has offered Indian Oil Corp Arab Heavy crude oil instead of Arab Light following an attack on its oil facilities over the weekend, an industry source told Reuters on Tuesday. IOC will receive full allocated volumes from Saudi Aramco in September and October, the source said, declining to be named as he was not authorised to speak with the media. However Aramco has said they would give some volumes of Arab heavy instead of Arab mix oil, the source added. This indicates that Saudi is offering heavy grade instead of light as Arab Mix is a combination of Arab light and heavy. No immediate comment was available from IOC.
Indian Oil Corp seeks LNG cargo for second half of October delivery
Indian Oil Corp is seeking a liquefied natural gas (LNG) cargo for delivery in the second half of October, two industry sources said on Monday. The cargo is sought for delivery at the Ennore terminal on India’s east coast. The tender closes on Sept. 19, the sources said.
Aramco less optimistic on output recovery
Saudi Aramco officials are growing less optimistic about a rapid recovery in oil production after an attack on the giant Abqaiq processing plant on Saturday, a person with knowledge of the matter said. All eyes are on how fast the kingdom can recover from the weekend’s devastating strike, which knocked out roughly 5 percent of global supply and triggered a record surge in oil prices. Initially, it was said that significant volumes of crude could begin to flow again within days but it may now take longer than previously thought to resume operations at the plant, the person said, asking not be named before an official announcement. Saudi Aramco is firing up idle offshore oil fields – part of their cushion of spare capacity – to replace some of the lost production, they said. The loss of Abqaiq, which handles 5.7 million barrels of oil a day, is the single worst sudden disruption to the oil market. Aramco customers are being supplied using stockpiles, though some buyers are being asked to accept different grades of crude oil. The massive drone strike has global ramifications, particularly for countries in Asia. The region consumes more oil than anywhere else, with China, India, Japan and South Korea among the world’s top buyers. The strike knocked out roughly 5 percent of the global supply. Oil prices surged the most on record Monday, with Brent crude seeing its biggest gain in dollar terms since futures started trading in 1988. The attack halved Saudi output and is crimping the availability of lighter grades such as Arab Extra Light and Arab Light. Those less sulfurous grades are already in high demand due to new rules mandating a switch to cleaner shipping fuel. Aramco has told customers it’s likely to replace the lighter grades with heavier oil, said the people, who asked not to be identified as the information is private. A North Asian refiner was notified it may get Arab Medium or Arab Heavy crude cargoes instead of the lighter varieties. Aramco also told some Chinese buyers that volumes won’t be affected but grades may differ.
India’s strategic petroleum reserve levels at 55% capacity
India’s strategic petroleum reserves stand at 55% of available underground storage capacity of 5.33 million tonnes, a top government official told Reuters on Monday. He did not wish to be identified as he was not officially authorised to speak on the subject. India has three strategic reserves in the southern cities of Vizag, Mangalore and Padur. “Vizag is currently filled up to 100%,” the official said, and added that Mangalore and Padur are currently around 55% and 25% respectively. Saudi Arabia has assured Indian refiners of continued supply, the Indian government said after an attack on Saudi Arabia’s crude oil facilities over the weekend.
Saudi oil attack: Petrol, diesel rates may increase by Rs 5-6
With global crude oil prices rising due to heightened geopolitical risks after Saturday’s drone strike at Saudi Arabia’s oil facilities, Indian consumers can expect a Rs 5-6 rise in petrol and diesel prices for every $10-per-barrel rise in global crude prices. Such an increase could be effected by oil marketing companies (OMCs), like Indian Oil, BPCL & HPCL, with a lag of a fortnight, a report by Kotak Institutional Equities warned. In reaction to Saturday’s strike at world’s largest oil producer, in early trade on Monday, Brent crude price shot up by nearly 20 per cent to over $71 per barrel, while WTI crude on the New York Mercantile Exchange rose nearly 20 per cent and touched $63.3. However, later in the day the prices of the two types of crude gave up some of their early gains. In the evening, Brent was trading at $66.6 and WTI at $60.5, both up by over $6 per barrel from their respective Friday close. On Monday, retail price of petrol was Rs 77.71 per litre, while in Delhi it was Rs 72.03 and Rs 74.76 per litre in Kolkata and Rs 74.85 in Chennai, Indian Oil’s website showed. Another report by foreign brokerage Jeffries said that with 85 per cent of India’s current oil demand being met from imports, a $10-per-barrel rise in crude prices could add $15 billion to its import bill. This in turn could further hit the country’s already weak economic fundamentals. Replacing crude oil from Saudi Arabia, which made up a fifth of India’s imports in the last few years, would be a challenge. A $10 rise in Brent will lift India’s annualised import bill by $15 billion, which is about 50 basis points (100bps = one percentage point) of the country’s GDP, the Jeffries report said. The Kotak report also noted that a sharp jump in global crude prices may put pressure on refining margins of refiners amid slowing demand and may also increase losses for OMCs. “On the other hand, higher crude prices may be construed positively for upstream PSUs and GAIL,” it said.