The expansion of Motiva Enterprises LLC’s refinery could spur increased demand for supertankers hauling Persian Gulf crude oil westbound, according to a report by New York-based shipbroker Poten & Partners.
The Port Arthur, Texas-based refinery is a refining and marketing joint venture of Saudi Refining Inc., a subsidiary of Saudi Arabian Oil Co., and Shell Oil Co., a unit of Royal Dutch Shell Plc. It’s due to increase output by 325,000 barrels a day during the first quarter, said the shipbroker.
The refinery’s heavy processing units at the expanded facility are suitable for Saudi Arabian crude grades, said Poten. Twenty-eight very large crude carriers have been booked for spot, or single-journey, loadings to the U.S. Gulf from the Middle East in February. That’s compared with a three-year average of eleven a month, said Poten.
“The additional call on Arabian Gulf crude oil could create demand for upwards of 13 to 15 fully-employed VLCCs on an annual basis,” Poten said in the report.
Freight rates for VLCCs hauling 2 million barrels of crude from the Middle East to the U.S. gained 6.4 percent since the start of the year to 34 industry-standard Worldscale points, according to the London-based Baltic Exchange.