3 February 2015
ICE Brent Futures at 16:30
Brent Crude Oil ($/bbl)
Month
Price
Change
MAR
56.31
+2.55
APR
57.38
+2.65
MAY
58.47
+2.72
Energy Futures at Settlement
WTI Crude Oil ($/bbl)
Month
Price
Change
MAR
53.05
+3.48
APR
53.86
+3.41
MAY
54.95
+3.40
Table of Contents
OPIS LPG Full Day Prices
p. 1
OPIS LPG Mont Belvieu
Snapshot
p. 1
OPIS Monthly Prices
p. 2
OPIS Freight Rates &
Netbacks
p. 2
OPIS NWE Propane
Forward Prices
p. 2
OPIS Global Forward
Prices
p. 3
SPOT MARKET RETURNS TO PREMIUM ON DAY TWO OF ACTIVE TRADE
**Trayport in conjunction with OPIS is pleased to announce that OPIS Europe and North
America LPG reports will be available directly on the Trayport screens. Please contact
[email protected] if you do not have access to a screen.
Northwest European propane swaps moved back over the $400/t mark for the first time
this year, with a second consecutive day of fruitful spot trading seeing the physical market
outpace strong paper gains.
During 4:00-4:30pm GMT trade, February swaps traded at $404/t on average -reflected a $23/t advance on the day -- with sources noting action around $410/t earlier in
the session.
Physical gains were even heftier. OPIS assessed the spot market at $405.50/t, up
$27.50/t on the day.
A trader returned to buy another parcel from a European oil major, this time at $402/t
and February +$5/t for 17-21 February delivery off the vessel Comet, Captain Markos, or
substitute. The offer included the major’s GT&Cs or mutually agreed GT&Cs.
The deal marked a $1.50/t premium to paper, a day after the same parties transacted at
$3/t below swaps.
The Captain Markos on offer, the first cargo slated from the U.S. Gulf Coast’s new
Nederland export project, continues to be eyed as delayed in leaving the dock in Texas. A
market source said that because of this delay and probable subsequent delays (four-tofive cargoes reported for March are said to not be loading), sales East had to be covered
in the market last week -- gauged as contributing to global price gains.
Following Tuesday’s deal, a trader and a large distributor continued to bid in the market.
The trader sought material for 18- 22 February (at an exclusionary basis Antwerp and
BASF-spec) up to $410/t, or $6/t over marker swaps. The distributor bid for 18- 23
February at $404/t and February flat, or eye-level with paper.
Overall, the NW European propane market is bracketed by bullish factors.
Brent crude oil, for one, has been solidly on the rise. Crude oil futures have been
(Continued on Page 3)
OPIS LPG Settle Prices ($/mt)
Location
Propane CIF ARA (ToT Cargoes)
Butane CIF ARA (+4,000mt)
Propane FOB Med
Butane FOB Med
OPIS CIF ARA Propane Swaps ($/mt)
Mean
Balance February 4:00-4:30pm
404.00
Physical-Paper Differential
+1.50
Low
403.50
390.00
478.00
513.00
High
407.50
394.00
482.00
517.00
Mean
405.50
392.00
480.00
515.00
OPIS LPG Mont Belvieu Snapshot ($/mt)
Mean
Change Location
+23.00 Mont Belvieu Non-TET Propane
285.90
+4.50
Mont Belvieu Non-TET Butane
317.10
Change
+27.50
+13.50
+10.00
+5.00
Change
+13.68
+3.40
MTD Avg
391.750
385.250
475.000
512.500
MTD Avg
279.061
315.401
OPIS Spot Prices ($/mt)
(c)Copyright by Oil Price Information Service (OPIS), a division of UCG. Reproduction of this report without permission is prohibited. Europe LPG Report is published each business day. OPIS does not
guarantee the accuracy of these prices. Pricing/Editorial Office: 800-275-0950. For a limited copyright waiver, call (888)301-2645.
OPIS Europe LPG Report
3 February 2015
OPIS Global Spot Prices ($/mt)
Date
3-Feb-2015
3-Feb-2015
2-Feb-2015
3-Feb-2015
CIF ARA
CFR Japan
Mont Belvieu Non-TET
FOB Arab Gulf
OPIS 44,000mt Freight Rates ($/mt)
Route
Rate
Change
AG - Japan
84.50
-3.00
NWE C3
Netback
-
Price
405.50
567.00
270.27
500.00
Propane
Change
+27.50
+50.50
+15.96
+45.00
NWE C4 Route
Netback
USGC - NWE
-
February Posted Prices ($/mt)
Saudi Arabia FOB
Algeria FOB
North Sea
Price
450.00
325.00
315.50
Butane
Price
392.00
577.00
314.84
520.00
Rate
Change
56.00
+1.00
Propane
Change
+25.00
-15.00
-23.00
Change
+13.50
+48.00
-1.13
+45.00
NWE C3
Netback
349.50
NWE C4
Netback
336.00
Butane
Price
480.00
340.00
297.50
Change
+10.00
-40.00
-50.50
OPIS End of Day NWE Forwards Prices ($/mt)
Month
Min
Max
Mean
FEB 2015
404.00
408.00
406.00
MAR 2015
392.00
396.00
394.00
APR 2015
384.00
388.00
386.00
MAY 2015
382.00
386.00
384.00
JUN 2015
381.00
385.00
383.00
JUL 2015
386.00
390.00
388.00
AUG 2015
392.00
396.00
394.00
SEP 2015
399.00
403.00
401.00
OCT 2015
406.00
410.00
408.00
NOV 2015
411.00
415.00
413.00
DEC 2015
418.00
422.00
420.00
JAN 2016
418.00
422.00
420.00
FEB 2016
416.00
420.00
418.00
Q1 2015
398.00
402.00
400.00
Q2 2015
382.00
386.00
384.00
Q3 2015
392.00
396.00
394.00
Q4 2015
411.00
415.00
413.00
Q1 2016
415.00
419.00
417.00
CAL 2015
395.00
399.00
397.00
CAL 2016
407.00
411.00
409.00
Change
+22.00
+18.00
+15.00
+15.00
+12.00
+11.00
+11.00
+12.00
+12.00
+9.00
+8.00
+8.00
+8.00
+20.00
+14.00
+11.00
+9.00
+8.00
+12.00
+5.00
Time Spread
+12.00
+8.00
+2.00
+1.00
-5.00
-6.00
-7.00
-7.00
-5.00
-7.00
0.00
+2.00
-- -+16.00
-10.00
-19.00
-4.00
-- --12.00
-- --
Pro/Nap
-84.00
-93.00
-97.00
-99.00
-102.00
-100.00
-98.00
-95.00
-92.00
-91.00
-87.00
-90.00
-96.00
-89.00
-100.00
-98.00
-91.00
-97.00
-95.00
-118.00
Naphtha
490.00
487.00
483.00
483.00
485.00
488.00
492.00
496.00
500.00
504.00
507.00
510.00
514.00
489.00
484.00
492.00
504.00
514.00
492.00
527.00
Change
+17.00
+17.00
+17.00
+17.00
+17.00
+16.00
+17.00
+17.00
+17.00
+18.00
+17.00
+17.00
+18.00
+18.00
+17.00
+17.00
+18.00
+18.00
+17.00
+18.00
OPIS Global Propane Forward Prices ($/mt)
Month
Belv.
Change
Arb
FEB 2015
281.00
+12.00
-125.00
MAR 2015
282.00
+12.00
-112.00
APR 2015
283.00
+12.00
-103.00
MAY 2015
285.00
+13.00
-99.00
JUN 2015
287.00
+13.00
-96.00
JUL 2015
290.00
+13.00
-98.00
AUG 2015
293.00
+12.00
-101.00
SEP 2015
300.00
+12.00
-101.00
OCT 2015
303.00
+12.00
-105.00
NOV 2015
307.00
+12.00
-106.00
DEC 2015
311.00
+13.00
-109.00
JAN 2016
317.00
+13.00
-103.00
FEB 2016
314.00
+11.00
-104.00
Q1 2015
282.00
+13.00
-118.00
Q2 2015
285.00
+13.00
-99.00
Q3 2015
294.00
+12.00
-100.00
Q4 2015
307.00
+12.00
-106.00
Q1 2016
312.00
+11.00
-105.00
CAL 2015
293.00
+13.00
-104.00
CAL 2016
310.00
+10.00
-99.00
CP
-- -488.00
457.00
451.00
449.00
449.00
449.00
451.00
456.00
465.00
473.00
473.00
471.00
488.00
452.00
449.00
465.00
471.00
458.00
475.00
Change
-- -+20.00
+15.00
+15.00
+15.00
+16.00
+15.00
+14.00
+13.00
+15.00
+15.00
+15.00
+14.00
+20.00
+15.00
+14.00
+15.00
+14.00
+16.00
+13.00
FEI
561.00
524.00
506.00
501.00
496.00
497.00
503.00
510.00
517.00
526.00
535.00
535.00
533.00
543.00
501.00
504.00
526.00
533.00
516.00
529.00
Change
+20.00
+19.00
+20.00
+22.00
+20.00
+18.00
+18.00
+18.00
+18.00
+18.00
+18.00
+18.00
+17.00
+20.00
+20.00
+19.00
+18.00
+18.00
+19.00
+14.00
E/W
+155.00
+130.00
+120.00
+117.00
+113.00
+109.00
+109.00
+109.00
+109.00
+113.00
+115.00
+115.00
+115.00
+143.00
+117.00
+110.00
+113.00
+116.00
+119.00
+120.00
Page 2 of 6
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OPIS Europe LPG Report
3 February 2015
OPIS 6-Month Forward Curve ($/mt)
Propane
Propane/Naphtha
Arb
East / West
Global Swaps
rallying and have put recent lows in the rearview mirror as
short-covering bolsters prices. However, with increasing
production (despite a dropping rig count) and turnarounds,
more significant crude oil supply builds are expected in the
coming weeks. Total U.S. inventories are already well over
400 million bbl, and a move above 410 million bbl in the next
couple of weeks is not out of the question.
Meanwhile, the aforementioned strength in East values was
seen as continuing to support the West. Far East Index
values sparked back into the lower $560s/t Tuesday, with
March CP in the upper $480s/t.
Closer to home, a smattering of recent North Sea
production problems coupled with a spate of cold weather (in
Europe and as well in Asia and the United States) have also
offered fundamental backing.
A new unplanned event at the Shell-Esso Gas and Liquids
(SEGAL) pipeline system into the UK arose Monday evening,
and was expected to impact around 8 million cbm/day of gas
output for 3-4 days.
Norway’s Sleipner field has entered its fifth day of reduced
production Tuesday, with 12 million cbm/day still affected.
Kollsnes gas processing plant resumed normal operations
Tuesday after an unplanned shutdown last Thursday.
“Propane is roofing due to strong fundamentals in both the
(Continued from Page 1)
(Continued on Page 4)
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OPIS Europe LPG Report
3 February 2015
(Continued from Page 3)
OPIS Europe LPG Report Methodology
OPIS assesses daily spot propane and butane prices at the key trading
hubs in northwest Europe and the Mediterranean. Editors record and
confirm deals, bids and offers, analyse supply and demand fundamentals,
and gauge market sentiment and outlook. Prices are quoted in US dollars
per metric ton. Times quoted are that of the United Kingdom.
In the northwest Europe propane market, OPIS assesses cargoes basis cif
Flushing for 10-20 days forward. The quantity, grade and quality, delivery
and nomination terms are as per the TOT contract for the current year. For
further details, see http://opisnet.com/methodology.asp#neweuropelpg
Butane prices are for field grade mixed butane cargoes above 4,000mt
delivered 5-20 days forward basis cif ARA.
In the Mediterranean, OPIS assesses field grade and refinery grade
propane and butane fob basis Lavera 5-15 days forward. Cargo sizes are
1,500mt and above.
OPIS contacts a cross-section of market participants daily. Information
published is according to the best available data on the day and is subject
to change. Please direct any enquiries to [email protected]
OPIS Europe LPG Editorial Staff
Karen Tang (London, UK)
[email protected]
+44 779 415 0133
Yahoo: kailin_tang
Diane Miller (NJ, USA)
[email protected]
+1 732 730 2530
Yahoo: dmiller_opis
Dermot McGowan (London, UK)
[email protected]
+44 752 522 5300
Yahoo: dermotmcgowan
Inge Erhard (London, UK)
[email protected]
+44 777 375 7940
Yahoo: ingepopfi
Jessica Nesterak (MD, USA)
[email protected]
+1 301 287 2721
Yahoo: jessica_opis
Jessica Marron (MD, USA)
[email protected]
+1 301 287 2625
Yahoo: jmarron_opis
Ronald Kwan (Singapore)
[email protected]
+65 6337 3519
Yahoo: ronaldkwan1
David Wang (Singapore)
[email protected]
+65 6337 3519
Yahoo: david.opis
East and NWE,” said a source. “Very cold weather for the 3rd
month (in a) row, propane still the preferred feedstock in
NWE, very low stocks and lots of delays in Algeria.”
Algeria's Skikda plant has reportedly shut down a liquefied
natural gas unit for maintenance that could take up to two
months, though the impact on the LPG export market did not
appear large.
Otherwise, poor weather was said to be leading to delays
from later January into later this week at Arzew. The Fritzi N,
bound for the Far East, was noted as running late for her 2
February ETA at Bethioua. A number of TBN vessels have
been seen as slated for the Mediterranean in February.
Med propane and butane prices were seen picking up a
little more strength, linked with bolder naphtha values. FOB
Med propane was assessed at $480/t with butane at $515/t.
In the butane market, a static 80% of naphtha assessment
remained in place Tuesday, with outright prices also
increasing alongside naphtha.
In Naphtha….
In the naphtha ARA market, the sense of underlying
strength was less obvious and sentiment slightly weaker, with
February and March cracks retreating a touch to -$1.7/bbl
and -$3.1/bbl by the close and Feb/March and March/April
spreads holding on to a +$3/t backwardation each.
Paraffinic grade-material was talked at a premium of about
+$10/t, versus $16/t earlier last week, with buyers’ resisting
sellers’ price ideas.
“Any cargo buyer is currently met with two or three offers,”
a market participant said.
Despite a major chemical producer’s public purchase of a
17-21 Feb. delivery at $493.5/t from an oil major, this week’s
widening of P/Ns was seen as restraining flows into the
cracking pool. Bidding interest prevailed in other public
discussion, mostly for 12.5kt sizes, drawing in more than half
a dozen parties.
The strength of the eastern market remained a supporting
factor, though advances in Europe led to tighter East/West
spreads, of $24.5/t for February and $23/t for March, down
$2/t each from last Friday.
NWE IMPORTS
FEBRUARY
- Venus Glory, ex-Targa, ldg mid-Jan, 46kt C3, arr Flushing
1 Feb
- Navigator Leo, ex Ust-Luga, ldg 24 Jan, 12kt C4, (1) arr
Hamina 27 Jan, (2) arr Terneuzen 1 Feb
- Sibur Voronezh, ex Ust-Luga, ldg 23 Jan, 11kt C3, ETA
Antwerp 2 Feb
- Captain Markos NL, ex-Nederland, ldg 2H Jan, 46kt C3,
offered NWE
- Comet, ex-EPC, ldg 28 Jan – 1 Feb, 46kt C3, offered NWE
NWE EXPORTS
FEBRUARY
(Continued on Page 5)
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OPIS Europe LPG Report
3 February 2015
(Continued from page 4)
- Pazifik, ex-North Sea, ldg 31 Jan – 1 Feb, 34kt, ETA Dorytol 13 Feb
- Captain Nicholas ML, ex-Karsto, ldg 4 Feb, 46kt C3, TBD
- Clipper Star, ex-North Sea, ldg 1H Feb, 33kt, dest Dorytol
WILLIAMS DELAYS ETHYLENE SALE FROM EXPANDED GEISMAR OLEFIN PLANT TO FEBRUARY
Williams Partners said on Tuesday that its expanded Geismar plant in Louisiana is expected to begin manufacturing
ethylene for sale in February after experiencing an unexpected delay in the final stages of commissioning.
Williams had previously expected to begin selling ethylene from the expanded plant in January.
OPIS notes that most ethylene plants in the U.S. process ethane as a feedstock, and some could use either ethane or
naphtha. A very small number could process butane. Ethylene could be used as a feedstock at olefins plants to produce
consumer products including plastics.
The plant was taken down from its final ramp-up procedure after it was determined that a brazed aluminum heat exchanger
became plugged, requiring cleaning and maintenance, Williams said.
This additional and unanticipated work is complete, and the plant will be turned back over to operations today to resume
startup, it said.
"We are focused on safely bringing the plant into sustainable operations, restoring the reliable supply of olefins to our
customers," said John Dearborn, senior vice president, Williams' NGL and Petchem Services.
Capacity at the expanded Geismar plant is 1.95 billion pounds of ethylene per year.
Williams Partners' share of the total capacity of the expanded plant is approximately 1.7 billion pounds per year.
Williams owns controlling interest in and is the general partner of Williams Partners.
In June 2013, Williams ethylene and olefins plant at Geismar suffered a fatal explosion that claimed two lives.
Williams Partners LP owns and operates both on-shore and off-shore assets of approximately 15,000 miles of natural gas
gathering and transmission pipelines, 1,800 miles of NGL transportation pipelines, an additional 11,000 miles of oil and gas
gathering pipelines and numerous other energy infrastructure assets.
The partnership's operated facilities have daily gas gathering capacity of approximately 11 billion cubic feet, processing
capacity of approximately 7 billion cubic feet, NGL production of more than 400,000 barrels per day and domestic olefins
production capacity of 1.95 billion pounds of ethylene and 114 million pounds of propylene per year.
U.K. TO CONSULT PUBLIC ON SHELL'S BRENT DELTA DISMANTLING PLAN FROM MID-FEB.
The U.K. is to consult the public on proposed decommissioning steps for the Brent Delta platform in the North Sea's east
Shetland basin from Feb. 16, for 30 days, operator Shell said Tuesday, heralding the end of a four-decade era in which the
field raked in almost one-tenth of the country's offshore oil and gas output and more than 20 billion pounds ($30 billion) in tax
revenues.
Production from the field's four installations is already limited to Brent Charlie, with operations at Brent Delta stopping in
2011 and at Brent Alpha and Bravo ceasing last November.
Shell, which co-owns the development with an ExxonMobil affiliate (50-50), suggests the removal of Brent Delta's 23,500mt topside (i.e., the section sitting on legs above the water) in one piece by a heavy-lift vessel. The plan requires approval by
the Department of Energy and Climate Change (DECC).
Remaining infrastructure -- including Brent Delta's legs, three other sets of topsides and legs, 140 wells and 28 pipelines -will be dismantled in a second stage, following a separate consultation, according to the operator.
The maturing field 186 km (116 miles) east of Scotland's Shetland Islands has been producing about 4 billion barrels of oil
equivalent since 1976. Peak output reached more than half a million barrels a day in 1982, helping turn the U.K. into a net oil
exporter.
The field's life was extended in the 1990s through redevelopment and depressurization, after which it could produce more
gas than oil.
With Brent crude oil supplies waning, present cash price discovery for North Sea benchmark grades revolves around a
basket of output from the Brent, Forties, Oseberg and Ekofisk fields.
"Virtually all of the North Sea's remaining 470 offshore installations, as well as 10,000 km of pipeline and 5,000 wells, will
need to be decommissioned over the next 30 years," according to Shell.
The disposal of disused offshore installations is overseen by DECC.
BG GROUP CUTS 2015 BUDGET BUT MAINTAINS PRODUCTION GROWTH
British gas producer BG Group is planning to slash capital spending this year by up to 36% as low oil prices drove asset
write-downs of nearly $6 billion recognized last quarter, although production was still forecast to increase in 2015.
BG's capital expenditure budget for this year has been cut to $6 billion to $7 billion, down from $9.4 billion in 2014 and
$11.2 billion in 2013. Spending is to focus on low-operating cost projects in Brazil and Australia, while investments in
developing base assets, including the North Sea, will be approximately halved from last year's levels of $2.6 billion,
according to their earnings presentation.
In 2014, BG's earnings for continuing operations dropped to a $1.051 billion loss following a noncash impairment charge of
$8.9 billion pre-tax -- $5.9 billion post-tax -- recognized in the fourth quarter.
The annual results are in a sharp contrast to BG's positive gain of $2.205 billion in 2013, a time when oil prices averaged
$108.61/bbl compared to $75.83/bbl during 4Q 2014. However, BG made $229 million in pre-tax gains after hedging Brent oil
at $105/bbl from April to December.
"We are reaching the end of a high capital expenditure cycle and will continue to add further production in 2015 from Brazil
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OPIS Europe LPG Report
3 February 2015
and Australia," BG Group's interim executive chairman, Andrew Gould said.
In 2015, production is expected to grow to 650-690 kboe/d.
In the North Sea, production commenced from Phase 2 of the West Franklin development in January, in which BG Group
has a 14.1% interest. The startup of Norway's Knarr was pushed back from Q4 to Q1 as adverse weather conditions
hindered further activity.
BG's 2014 E&P production dropped by 4% on the year to 606 kboe/d -- 136 kboe/d of oil, 86 kboe/d of liquids, and 384
kboe/d of gas -- which fell toward the lower end of their guidance, as declines in Egypt, the U.S., Kazakhstan and Tunisia
more than offset production ramp-ups from new developments in Brazil, Bolivia, Australia and the U.K.
BG's LNG Shipping & Marketing operating profits forecast was slashed from $2.5 billion realized in 2014 to $0.7 -- 1.0
billion in 2015, with lower volumes anticipated and ongoing purchases from the spot market to make up contract shortfalls.
The downward trend in Egypt, which makes up 10% of BG's production volume, was expected to continue for the
foreseeable future. Declining reservoir performance and ongoing gas diversions to the domestic market continue to leave
minimal supplies for the Egyptian LNG facility. BG only lifted one LNG cargo in 2014 compared to 25 in 2013. However, the
Egyptian government made two outstanding debt payments to the Group in the final quarter of 2014 to reduce the amount
owed to BG to $0.9 billion, with $0.7 billion overdue.
BG's incoming chief executive, former Statoil head Helge Lund, was said to be joining shortly after this remuneration
package was revised in December in response to shareholder concerns.
MORGAN S. STILL PURSUING GLOBAL OIL TRADING ASSET SALE; NEW SUITORS IN LINE
Morgan Stanley is continuing to sell its global physical oil trading assets after the expected cancellation of the mega deal
with Rosneft, a Morgan Stanley spokesman told OPIS on Tuesday.
Australian bank Macquarie Group and private equity firm KKR & Co. are reportedly interested in buying Morgan Stanley's
physical oil trading assets, according to a report issued by The Wall Street Journal on Tuesday.
The Morgan Stanley spokesman declined to comment on preliminary negotiations of the asset sale.
The Rosneft-Morgan Stanley deal dragged out for about a year before it was canceled. Morgan Stanley would have ceased
to be a physical player if the deal with Rosneft was completed.
On Dec. 22, 2014, Rosneft said the deal to buy Morgan Stanley's global oil merchanting business was terminated due to
an objective impossibility to complete the deal that had arisen as a result of regulatory clearances being refused.
Macquarie is a global marketer and trader of energy products, including natural gas, LNG, power, crude oil, coal, refined
products and natural gas liquids, according to the company's website.
Macquarie is the fourth-largest trader of natural gas in North America, and the largest nonproducer on these rankings.
In this trading role, the bank's activities include storing, merchandising, marketing and transporting a wide range of energy
and energy-related products in domestic and international markets.
Traders in the U.S. told OPIS that Macquarie is predominantly a natural gas and power trading company in North America,
and it has dabbled in refined oil products trading and marketing business when it had the production offtake at the 115,000b/d Come-by-Chance refinery on the east coast of Canada.
Every month, Macquarie had access to about four gasoline cargoes and four diesel cargoes from Come-by-Chance
refinery. Gasoline cargoes were sold into the U.S. East Coast market, and diesel was exported to Europe.
Since the offtake agreement with Come-by-Chance ended, Macquarie has been conspicuously quiet in the U.S. oil
products market.
Macquarie also has a significant presence in the North American crude trading market.
Morgan Stanley offers a vast global physical oil trading and terminaling network. It is the largest investment bank trading in
the global physical oil market.
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