ADNOC accepts May loading term LPG nominations with some delays: sources

Singapore — Abu Dhabi National Oil Co has announced acceptances of May-loading term LPG cargo nominations with delays for a few lifters, but without cuts, market sources said April 12.

A China-based importer saw a few days' delay from its nominated dates while a Japanese trading house received a 10-day delay on its May cargo, sources said.

"We do not have ADNOC cargo for May but I heard some delays," a source with a trading house said.

This was similar to ADNOC's acceptances of February and March loading term cargo nominations, which was largely without cuts, but with several days of delays for some lifters.

ADNOC had announced its acceptance of April-loading term cargoes without delays or cuts.

These announcements will be followed by Saudi Aramco's acceptances of May cargo nominations around April 20.

Aramco had announced acceptances of term LPG nominations for April loading with three to five cargoes being deferred from April to later months due to the kingdom's extension of crude production cuts into April, S&P Global Platts reported earlier.

With Saudi Arabia unwinding its voluntary 1 million b/d in extra crude production cuts over May through July, the market expects more Middle East LPG supply to emerge from May loading onward.

Qatar had accepted term nominations for May loadings without cuts or delays, sources said earlier.

Spot supply from the Middle East has increased recently, with Kuwait Petroleum, or KPC, selling a spot 44,000 mt evenly-split LPG cargo for May 4-5 loading from Mina al-Ahmadi to E1 at a discount of around $9/mt to Saudi Aramco May Contract Price for propane and butane, DES basis.

Prior to that, KPC sold a 44,000 mt evenly-split LPG cargo for April 29-30 loading from the same port at a discount in the high single-digit to Saudi Aramco May propane and butane CP.

In line with higher supply from the Middle East, Indian spot demand has also resurfaced.

Indian Oil Corp. sought a mixed 44,000 mt LPG cargo for May delivery in its first spot requirement for the year, which is expected to boost demand for butane, sources said.

FACTS Global Energy expects Middle East LPG supply in 2021 to exceed 3 million mt but under 4 million mt above 2020 volumes, making for total projected exports of nearly 40 million mt. Trade sources estimate Middle East exports at 37 million to 38 million mt, while S&P Global Platts Analytics expects Middle East LPG exports to grow about 4.5% this year to slightly above 37 million mt, and by another 6% to about 39 million mt in 2022.