Tengizchevroil to Double LPG Export through Taman Port in 2018

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).