European refiners are making huge demand of Nigeria’s newest export crude, the medium sweet Egina, which is proving popular with European refiners due to its high distillate yields, with output from the Total-operated field close to its full capacity of 208,000 barrels of oil a day b/d.
The Egina deepwater field came onstream late December and production is now averaging just over 200,000 b/d, providing a near 10 per cent boost in Nigerian crude production.
Buying interest for both spot and term barrels has been robust, especially among refiners in France and the Netherlands.
India and Italy have also been consistent customers of the grade, which saw its first exports in February.
Refineries in China, Norway, Sri Lanka, the UK and the US have also taken a cargo, data from Platts cFlow, trade flow software, showed, while a cargo from the August program is poised to travel to Brazil.
Despite a slight glut in light sweet and medium grades in the Atlantic Basin, distillate-rich crude grades — especially those in West Africa and the Mediterranean — are finding support from strong distillate refinery margins.
Mediterranean refineries were looking at grades such as Egina and Forcados as the “value is in the distillates cut”, a trader active in the Nigerian crude market said.
Egina has been clearing well recently, with almost all the August program sold and September-loading barrels also seeing strong buying interest.
“August has been relatively slow for the lighter grades however Egina has been going quite well,” a second trader said.
In terms of value, sources said Egina has been trading in a range around the level of Forcados, a similar grade. Forcados was assessed at Dated Brent plus $1.75/b Tuesday, S&P Global Platts data showed.
Egina loadings in August and September were expected to average 214,516 b/d and 200,000 b/d, respectively, according to Platts estimates.
Production from the field has been stable, another reason it attracting good demand.
Egina has been classified as a medium sweet quality crude oil with a low level of acidity. When refined, Egina produces a high yield of middle distillates and vacuum distillates, making it attractive to refineries equipped with cracking units in the Americas, Asia or Europe.
The crude has a specific gravity of 27.3 API, along with a sulfur content of 0.165 per cent.
Crude from the field is exported via the Egina floating production, storage and offloading vessel, which has an oil processing capacity of 208,000 b/d and a storage capacity of2.3 million barrels.
The $16 billion deepwater project is the biggest oil and gas investment in Nigeria.
Nigerian crude oil and condensate production has ranged from 1.9 million-2.1 million b/d this year, compared with 1.7 million-1.9 million b/d last year, mainly because of the start-up of Egina.
Total operates the Egina project with a 24 per cent stake and is partnered by China’s CNOOC along with a consortium consisting of Vitol, Africa Oil Corp. and Delonex Energy.