ADNOC announces Jan LPG term acceptances without cuts, delays

Abu Dhabi National Oil Co., or ADNOC, has announced acceptances of January-loading term LPG cargoes without cuts and delays, but with some advanced dates, trade sources said Dec. 10.

ADNOC's acceptances of December, November, October, September, August, July, June, and April-loading cargoes were in line with term lifters' nominations, while those for March and May term nominations saw some delays, but no cuts, S&P Global Platts reported earlier.

Qatar Energy had earlier announced acceptances of January-loading term cargo nominations without cuts, but some lifters were given delayed loading dates, traders said, adding that a Chinese buyer's loadings were delayed by up to two weeks.

The propane premium to butane in the Middle East widened by $15/mt on the day to $30/mt Dec. 9, and was notionally pegged at that level Dec. 10.

Traders said the widening propane-butane premium was prompted by market talk that Indian lifters had asked Middle Eastern producers to cut or delay January term cargoes, amid an absence of additional spot demand for January FOB cargoes.

India normally imports evenly split, or butane-heavy cargoes.

The request for delays or reduced volumes could be due to lower demand, after hefty imports in November and December to meet higher consumption during the festival season led to congestion and discharge delays of up to over two weeks at Indian ports.

The waiting time has been easing around late November and early December, shipping fixtures showed.

India's LPG imports in October rebounded 2.3% on the month to 1.61 million mt, but lagged the peak of almost 1.71 million mt in August, Petroleum Planning and Analysis Cell, or PPAC, data showed.

Its LPG consumption rose 5.4% on the month to a nine-month high of 2.49 million mt in October, recovering for the second month following a brief drop in August, PPAC data showed.

Spot demand lags

Chinese propane demand was steady and the recent price declines could whet propane dehydrogenation plants' appetite for the gas, trade source said, though this could be countered by some maintenance-related plant closures.

Tianjin Bohai Chemical plans to close its 600,000 mt/year PDH plant for turnaround in the first quarter of 2022, Platts reported earlier citing a company source. The move could impact demand by 50,000 mt/month, according to trade sources.

The lack of spot FOB demand in Asia was largely discouraging Middle Eastern suppliers from offering spot cargoes. Qatar Energy had offered via a tender a 45,000 mt propane cargo for Jan. 14-26 loading, after selling 45,000 mt of propane for Dec. 15-24 loading in November.

ADNOC's acceptances of January-loading nominations will be followed by Saudi Aramco late in the week starting Dec. 12.

Aramco also announced acceptances of December-loading cargo nominations without cuts, delays, or advancements, after announcing November-loading acceptances without cuts or delays. It had not been offering spot cargoes in recent months.

OPEC and its allies agreed at the Dec. 2 meeting to raise oil production as planned by 400,000 b/d in January 2022, though the alliance said if crude demand were to soften, it could convene again to cancel the planned January output increase.

FOB Middle East propane averaged $823.67/mt in November, down from $847.45/mt in October. FOB Middle East butane averaged $789.17/mt in November, down from $821.74/mt in October, Platts data showed.

FOB Middle East propane averaged $665.86/mt between Dec. 1-9, while FOB Middle East butane averaged $649.43/mt.