Purchasers lining up for Russia's new ESPO blend
ExxonMobil Corp. and Mitsui & Co.—each said to be buying 730,000 bbl—are the latest in a growing list of purchasers of crude oil delivered by Russia's Eastern Siberia-Pacific Ocean (ESPO) pipeline.
OGJ Oil Diplomacy Editor
LOS ANGELES, Feb. 24 -- ExxonMobil Corp. and Mitsui & Co.—each said to be buying 730,000 bbl—are the latest in a growing list of purchasers of crude oil delivered by Russia's Eastern Siberia-Pacific Ocean (ESPO) pipeline.
The two firms join other oil companies in Japan and South Korea, including GS Caltex and SK Energy, which have already bought supplies of the new crude, which started flowing from Eastern Siberia in late December.
This week’s purchase will arrive in Japan in early March and be processed at two ExxonMobil-affiliated refineries after being carried along the ESPO line to Skovorodino and then by rail to Russia’s Pacific Coast port of Kozmino.
According to industry observers, the supplies of East Siberian crude oil will aid Japan in reducing its heavy dependence on Middle Eastern oil, which currently stands at 90%.
Russian crude costs less to transport than oil from the Mideast nations, taking just 3-4 days sailing time to reach Japan, compared with 20 days from the Middle East.
Apart from quicker shipping and lower transport costs, East Siberian crude also has a lower specific gravity than oil from the Middle East, which enables production of more gasoline and kerosine.
Last October, officials at Russia’s energy ministry said the new ESPO-brand crude would be light and medium-sour, superior to Urals export blend but inferior to Siberian Light (OGJ Online, Oct. 12, 2009).
As a result, other Japanese oil distributors, such as Nippon Oil Corp., are considering the idea of sourcing supplies of the ESPO blend.
Japanese and Korean firms are not alone in seeking the new Russian oil as the Asia-Pacific crude market last week saw the first sale of ESPO to a Chinese buyer, a move analysts said may set a new phase in trading of the new Russian stream.
The purchase was made by Unipec, which bought a 730,000-bbl cargo of ESPO crude from Rosneft. The oil will be shipped out of the Kozmino terminal on Mar. 17-18.
Increasing demand in Asia for the new Russian blend confirms Moscow’s vision of the long-awaited ESPO pipeline.
“It is a strategic project, which enables us to enter the growing markets of the Asia-Pacific region,” said Russian Prime Minister Vladimir Putin in a ceremony to launch the new line at the port of Kozmino (OGJ Online, Dec. 29, 2009).
Contact Eric Watkins at email@example.com.