PES seeks imports amid closed Bakken arb

OREANDA-NEWS. Refiner Philadelphia Energy Solutions (PES) has fixed an estimated 5.525mn bl of crude from Iraq, west Africa and eastern Canada for loading between 26 September and 17 October as the arbitrage to ship Bakken crude by rail to Philadelphia has closed.

PES, one of the largest recipients of Bakken by rail on the Atlantic coast, operates a 280,000 b/d rail unloading facility at its 330,000 b/d refinery in Philadelphia, Pennsylvania.

The company in July sought to acquire 85.25pc of BOE Midstream, a logistics firm that operates a 210,000 b/d rail loading facility near Dickinson, North Dakota, equipped with more than 640,000 bl of storage. It expected to close the deal in the third quarter.

The estimated premium for Bakken delivered to Philadelphia to Brent delivered to the US Atlantic coast has averaged \\$3.76/bl in September to-date, up from 75?/bl in August.

PES took between 956,000 bl and 2.409mn bl of crude imports from January through June, the most recent month for which EIA company level import data are available, including an Aframax cargo (950,000 bl) of Chadian crude each month.

The prompt WTI/Brent spread has averaged \\$3.05/bl in September to-date, the narrowest average spread since January.

Bakken for pipeline injection at Clearbrook, Minnesota, climbed along with light, sweet Syncrude during October trade (1-17 September) amid significant supply disruptions.

Syncrude Canada suspended production following a 29 August fire at its 350,000 b/d Mildred Lake upgrader near Fort McMurray, Alberta, and expected to produce little synthetic crude oil (SCO) during the first half of September. It expected normal production to resume toward the end of the month.

In addition, CNOOC subsidiary Nexen Energy began to shut down its 75,000 b/d Long Lake upgrader in early September to comply with a suspension order issued in late August by provincial regulators.

The Alberta Energy Regulator (AER) 6 September approved the partial restart of pipeline operations at the CNOOC subsidiary's 75,000 b/d oil sands facility, enabling Nexen to keep 75pc of the facility online. On 16 September the AER approved the restart of 10 additional pipelines, enabling Nexen to resume all Long Lake operations.

In addition, Suncor Energy planned to complete maintenance on one set of cokers at its 240,000 b/d Upgrader 2 near Fort McMurray, Alberta, toward the end of the third quarter.