First Algerian Saharan crude oil for Venezuela under new deal

Oct 13, 2014 12:00 AM

The first cargo of Saharan crude bound for Venezuela as part of a new deal between state-owned PDVSA and Algeria's Sonatrach loaded over the weekend, traders and shipping sources said Monday.

After spending nearly two weeks off the coast of Algeria, the Carabobo VLCC is now sailing westward according to shipping sources and Platts ship tracking software cFlow. According to cFlow, the ship is now laden with a cargo.

The vessel is believed to be ultimately bound for Venezuela, although its next destination according to cFlow is Algeciras in Spain. The Carabobo is currently controlled by PDVSA.

"It loaded two days ago," a crude trader said.

Early last month, industry sources said that PDVSA was looking to bring sweet, naphtha-rich Saharan from Algeria to use both as a diluent for its heavy crude production in the Orinoco Belt and as feedstock to restart the shuttered lubricants plant at the Curacao refinery.

Sources said the shipment was scheduled to load within the first 10 days of October and could pave the way for the first regular crude imports by PDVSA since the company was founded in the mid-1970s.

Saharan Blend is a light sweet, naphtha- and kerosene rich crude grade produced from a variety of oil fields in southern Algeria. It is used by end-users in Europe and Asia both alone, and to blend with heavier, more sulfuric sour crude grades.

Crude extracted from the Orinoco Belt has an API gravity of around 8.5 API and is highly acidic with a high metals content, making it difficult to export without first diluting it with naphtha.

Traders said that it is not yet clear how much Saharan the company is planning to export moving forward, but that it is expected to become a regular or semi-regular flow.

Shipping sources said that future exports would not necessarily always be done on PDVSA-owned vessels.

"[Carabobo is] a PDVSA ship but they would do it on whatever vessel suited them, this one happened to have already ballasted through the Suez Canal. A charterer or an owner will decide to trade their ships based on how the market looks at that moment in time," said a shipbroker.

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