PdV halts Algeria oil imports, returns to naphtha

OREANDA-NEWS. Terminal logistics, pricing and payment problems have forced Venezuelan state-owned PdV to halt imports of Algerian Saharan Blend light crude for use as a diluent with Orinoco extra-heavy crude, the energy ministry confirmed today.

PdV purchased about 4mn bl of Saharan Blend crude from Algerian state-owned Sonatrach in late 2014.

PdV resumed imports of more costly heavy naphtha last month after terminal operators at the Jose complex in Anzoategui state reported "deficiencies" in existing storage and crude handling infrastructure necessary to handle the 45?API Algerian grade.

PdV issued an open market tender in January seeking up to 3mn bl of heavy naphtha for delivery from February to July 2015 in cargoes of 500,000 bl, with an option to buy a further six cargoes of 500,000 bl each in second half 2015.

PdV will blend the heavy naphtha and its own Mesa 30 crude with Orinoco extra-heavy crude to yield an exportable Merey 16 heavy crude blend that it ships to China and the US, the energy ministry said.

PdV's decision to resume importing naphtha instead of cheaper Saharan Blend implies higher upstream production costs for its Orinoco joint ventures.

But PdV's Jose complex and other PdV terminals in eastern Venezuela's coastal region lack the infrastructure to store, offload and transport large volumes of light crudes to the Orinoco oil belt region, where PdV and its joint venture partners have blending facilities, the ministry said.

PdV's heavy naphtha imports are "easier to store and transport to the oil belt," the ministry said.

PdV also had "pricing and payment problems" with Sonatrach, the ministry added, but declined to give more details.

Sonatrach could not be reached for comment.

PdV plans to continue importing Russian Urals crude mainly for the 335,000 b/d Isla refinery on Curacao which it operates under a lease that expires in 2019, the ministry said.