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Retired tanker transports Thailand’s first-ever Urals crude

Monday, 26 June 2017 | 16:00

A retired Tempera tanker operated by Neste Oil is on its last voyage to make the first-ever delivery of Baltic Urals crude to Thailand, where the ship will remain to be recycled, traders said and shipping reports showed.

ExxonMobil bought 100,000 tonnes of Urals, which was loaded in Primorsk on May 21 for delivery to its Esso refinery in Sri Racha in July. The shipment was possible due to low freight rates for the 15-year-old ice tanker’s last voyage.

Finland’s Neste Oil had no immediate comment.
An ExxonMobil spokesman said it was not company practice to discuss operational details. Exxon’s Sri Racha refinery has processed Russian sweet ESPO Blend – traded in Asia-Pacific – but it will take Urals for the first time. Urals is not typically sold to Thailand because of the long distance, which makes shipping too expensive.

Although Urals arbitrage to Asia has become more common this year due to a low Brent-Dubai spread and a shortage of sour crude in the region due to OPEC output cuts, it is unlikely Urals would be viable for deliveries to Thailand, traders said. “Baltic Urals to Thailand on Aframax is just impossible if you want to make any money,” a Urals market trader said. “Above all Tempera is a 1A Super ice class tanker which would make the delivery even pricier.”

Traders said if Exxon had sealed a big discount for the shipment it would be viable. The freight rate for Tempera’s last voyage was not available. Neste Oil currently operates two other ice class tankers – Mastera, built a year after Tempera, and Stena Arctica.

Neste Oil refineries mostly work on Urals crude oil and some North Sea crudes and the tankers operate only in the Baltic region.
Source: Reuters (Reporting by Florence Tan in Singapore and Olga Yagova in Moscow; editing by Susan Thomas)

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