BP to Take a New Stand in the U.S.

The oil giant, British Petroleum (BP), is set to spend $10.5 billion (U.S.) for thousands of acres of land containing 4.6 billion barrels of oil and gas in the United States. It will mop-up BHP Billiton’s shale operations in Texas and Louisiana in the largest deal in 20 years, in hopes it will be transformational for the business.

The wells in the crude-rich Permian, Eagle Ford, and Haynesville basins produce around 190,000 bbld of oil. The deal puts BP at the heart of the boom in production from U.S. shale that has upended the global markets, and set the U.S. on course to become a net oil exporter by 2025.

This marks a major turning point for BP, which, for years following the 2010 Deepwater Horizon disaster, has abstained from taking an on shore presence. Some 11 people died when a rig exploded in the Gulf of Mexico, costing the company around $63 billion.

Propane prices for large, fully refrigerated cargos are at $572 (U.S.) per tonne cif Amsterdam/Rotterdam/Antwerp (ARA) and at $562 cif ARA for butane. Both products have increased from last month, with propane adding $4 per tonne and butane $14 per tonne.

The coaster markets have been relatively quiet, with the butane market slowly rebalancing with more availability seen on large and coaster segments for the beginning of September. Gasoline blenders are ready to begin entering the butane market to prepare the winter spec, which should keep providing support on prices.

The latest indication of propane swap deals are September $570-$574 per tonne cif Northwest Europe and October $569-$573 per tonne cif Northwest Europe. In the Mediterranean, LPG supplies remain tight, with some propane and butane trading activity. Prices for large, fully refrigerated cargos of propane now stand at $620 per tonne cif Lavera, South of France, and at $564 per tonne cif Lavera for butane.

Propane has hardened by $4 per tonne and butane by $5 per tonne. Sonatrach, Algeria’s national oil company, has posted new contract prices for August at $530 per tonne Skikda and Bethouia for propane and at $540 per tonne fob for butane, the same as July. The Saudi Arabians have set new contract prices for August at $555 per tonne fob Middle Eastern (M.E.) terminals for propane and at $570 per tonne fob M.E. terminals for butane. Over the month, propane softened by $5 per tonne and butane increased by $1 per tonne.

The shipping market, with the West-to-East arbitration open, owners’ freight expectations are still in the mid-low $70s East and low $40s West. Examples of large shipping fixtures: the 9500 cu meter capacity Epic Manhattan has been chartered by ExxonMobil (Irving, Texas) to load a full cargo of butane from Fawley for delivery to Morocco. The Echo Frost, 22,000 cu meter capacity, has been fixed by Glencore (Baar, Switzerland) to load a full cargo of LPG from Taman for delivery options the East Mediterranean. The Reimei, 80,000 cu meter capacity, has been taken by Total (Paris) to load a full cargo of LPG from the Middle Eastern Gulf for delivery options East. The Doraji Gas, 84,000 cu meter capacity, has been chartered by BP (London) to load a full cargo of butane from Ferndale, Wash. for delivery options East.

(SOURCE: The Weekly Propane Newsletter, August 27, 2018. Cick above to subscribe.)