Saudi Aramco Sells First Crude From Permian Pipelines
SINGAPORE/NEW YORK/SEOUL (Reuters) — Aramco Trading Company (ATC) sold its first-ever cargo of U.S. West Texas Light (WTL) crude, with a South Korean refiner the buyer, as the Saudi Aramco unit expands its U.S. oil dealings to boost trade volumes, four people familiar with the matter said.
ATC has been shipping U.S. oil such as West Texas Intermediate (WTI) Midland crude, Eagle Ford condensate and sour grade Mars to refiners in Japan, South Korea, Taiwan, Thailand and the United Arab Emirates since last year, they said.
Besides supplying U.S. Eagle Ford condensate, ATC’s WTL shipments could increase as more of the light oil becomes available for export after new pipelines connect shale oil production from the Permian Basin to U.S. Gulf Coast terminals, one of the people said.
Plains All American’s 670,000-bpd Cactus II pipeline began commercial deliveries this month. The pipeline segregates WTL barrels to maintain quality from the oilfield to the dock, which is vital to Asian refiners, the people said.
ATC expanded its selection of U.S. crudes earlier this month, loading its first-ever 1 million-barrel cargo of WTL, the people said. The shipment is expected to arrive at Hyundai Oilbank’s refinery in Daesan in October, they said.
The shipment follows an agreement this year for Saudi Aramco to take a 17% stake in Hyundai Oilbank, South Korea’s smallest refiner by capacity.
This was also Hyundai Oilbank’s first WTL crude purchase, two of the sources said.
Over the past year, more of the output from the Permian Basin has been of super light WTL oil which one source said should be seeing high demand across Asia.
“Asia should have demand for it with their (condensate) splitters and capabilities to run ultra light crudes,” the source said.
South Korea surpassed Canada to become the biggest buyer of U.S. oil in June.
The sources declined to be named as they were not authorized to speak to the media. Saudi Aramco and Motiva did not respond to a request for comment. Hyundai Oilbank declined to comment.
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