Date: 23 November 2018 , 20:59
News ID: 2696

Iraq's Somo receives Kirkuk crude at Ceyhan

Iraq's state-owned crude marketing company Somo had received just over 250,000 bl of Kirkuk crude into its storage tanks at the Turkish port of Ceyhan, as of 0900 local time today.
Iraq

By late in the day, shipping reports said Somo had received an allotment of 600,000 bl originally expected over a two-day period. The transfer began yesterday at 1800 Ceyhan time. The crude is arriving directly from the Iraq-Turkey pipeline, not from Ceyhan storage tanks controlled by the Kurdistan Regional Government (KRG). Some 200,000 bl was already in the Somo tanks.

Flows through the pipeline averaged 17,500 bl/hour in the 24 hours to 0900 local time, during which period KRG tanks received 35,000 bl.

Baghdad on 16 November agreed to restart flows through the Iraq-Ceyhan pipeline from federally-owned fields.

The intention of the parties is that Somo will receive 600,000 bl each week.

Now the first batch of 600,000 bl is available, it will be moved by pipeline to Turkish refiner Tupras' 113,4000 b/d Kirikkale plant. This has not been confirmed yet by Tupras or Somo. Prior to its last shipment in June 2017, Somo had largely sent its Kirkuk crude to Kirikkale.

Federal Iraq last sent Kirkuk crude through the Iraq-Ceyhan pipeline over the September 2016 to June 2017 period, with an average of 43,000 b/d according to Argus estimates, before the agreement to use the pipeline broke down.

Regionally, rival Russian Black Sea Urals is trading at the strongest premium to North Sea Dated in several years, with a regional shortage of sour supplies caused by lower availability of Iranian crude. The majority of KRG-marketed crude with December-loading has largely sold out, traders said.

The renewed flows come at an auspicious time for Somo, which is in talks to negotiate year-long crude term arrangements for 2019. Allocation assignments are likely to be announced next week. Some buyers are understood to have struck deals allowing the option to lift Kirkuk crude this year, if and when the supply were available. Somo has not sold any Kirkuk crude this year to date, tracking data indicate.

source: Argus Media