17 September 2016, Sweetcrude, Abuja – Loadings of Nigeria’s Qua Iboe crude will resume in late September, more than two months after a suspected attack on a pipeline shut in the country’s biggest export grade crude, trading and shipping sources said Friday.
A Suezmax has been placed on subjects to load 950,000 barrels of Qua Iboe at the end of September, sources told S&P Global Platts.
Clearlake – the shipping arm of Gunvor – was heard to have booked the South Sea for a Qua Iboe UKC/East voyage for September 29-30 loading dates.
The cargo has been sold to Thai refiner PTT, according to shipbroker reports. Sources at both Gunvor and PTT were not immediately available for comment.
Trading sources also said there was a September 24-25 Qua Iboe cargo which had been sold but details have not been confirmed.
A provisional October loading schedule has also been circulated, traders said, showing nine cargoes of 950,000 barrels each, totaling 8.55 million barrels, or 275,806 b/d.
Nigeria typically exports some 300,000-340,000 b/d of Qua Iboe but since the pipeline outages production has been minimal.
Sources said Qua Iboe cargoes for October loading had already been traded on the market.
“Now we just need to wait and see if Qua will actually load or if there are issues with that cargo,” a West African crude trader said. “It is going to be a widely observed cargo, that is for sure.”
ExxonMobil declined to comment on operating activities but did say the force majeure on Qua Iboe was still in place.
Qua Iboe has been under force majeure since July 14 and the last cargo was exported July 12, according to data from cFlow, S&P Global Platts trade flow software.
ExxonMobil said at the time that this was because of a “system anomaly.” But earlier that week, a militant group, the Niger Delta Avengers claimed to have carried out an attack on the Qua Iboe export pipeline.
Freight Rates Boost
The return of Qua Iboe cargoes to the market provided an immediate boost to WAF Suezmax rates, with shipowners bullish at the prospect of the wave of extra stems the grade will bring each month.
“Qua Iboe barrels have come out and the market is jumping,” said a shipbroker.
The WAF-UK Continent route, basis 130,000 mt, was assessed Worldscale 12.5 higher Thursday, with two ships placed on subjects for voyages on the route at this level. As well as an anticipated full loading program for Qua Iboe in October, there has also been some charterer inquiry for late September, with Clearlake the most widely reported fixture so far.
“We have now seen four more stems than expected in the third decade of September, aided by Qua Iboe coming back online,” a second shipbroker said. “The market has risen owing to a potent mix of bullish fundamentals and sentiment.”
Nigeria, which was Africa’s largest oil producer until a few months ago, has seen its output slump to 30-year lows due to renewed militancy in the country’s oil-rich Niger Delta.
Attacks on the country’s oil and gas infrastructure have increased at an alarming pace this year, slashing production to around 1.4 million-1.5 million b/d currently from 2.2 million b/d in January.
Three of Nigeria’s main export crude grades — Qua Iboe, Brass River, and Forcados — are currently under force majeure, with more than 500,000 b/d of production affected. Force majeure on Bonny Light was lifted on September 6 following the reopening of the Nembe Creek Trunk Line.