The Dangote Refinery has despatched its first jet fuel cargo to Europe. This is as the company rapidly scales production, according to S&P Global Insights report.
BP is currently transporting its first jet fuel cargo to Rotterdam from Dangote, after being awarded part of a 120,000 metric tonnes tender offered for the end of May, the research firm said, quoting four market sources.
Two sources confirmed that the Doric Breeze ship marked the inaugural BP cargo, loading 45,000 mt of supply from Lekki on May 27, according to S&P Global Commodities at Sea data.
Cepsa also secured part of the tender, with the Spanish refiner expected to deliver supply to the continent imminently, traders said.
Neither of the companies were available for comments on purchases of jet fuel from the refinery, while a representative from Dangote previously confirmed to S&P Global Commodity Insights that the refinery has complied with European jet A1 standards since the product first started being shipped within Africa in April.
The inaugural European shipment demonstrated the growing reach of products from the 650,000 bpd Dangote refinery as it has rapidly ramped up operations and aims to shake up established West African trade flows.
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Dangote has exported six jet fuel/kerosene cargoes starting April 8, with all material delivered to Senegal, Togo or Ghana, according to CAS data. BP is also expected to continue supplying jet fuel to the West African market with product from the refinery, sources said.
European traders cautioned that fresh jet fuel flows could exacerbate existing weakness as Nigerian supply makes its way into a highly saturated market. According to Platts assessments from Commodity Insights, CIF Northwest European jet fuel cargoes fetched a premium of $52/mt to the front-month ICE LSGO contract May 29, down $3.25/mt on the day and $11.25/mt on the week.
With ample supply weighing on the European market, the arbitrage window from the Persian Gulf was firmly shut, it said.
The spread between the CIF NWE (average for the high price and the low price for naphtha) June and July contracts moved into a contango (where spot or cash price is lower than forward price) of minus $1.50/mt May 29.
The contango structure, reflecting prompt market weakness, was last assessed lower April 25, when Platts assessed the second-month contract at a $1.75/mt premium to the front-month equivalent, Commodity Insights data showed.
The refiner’s export portfolio could soon be reshaped as it has pursued ambitious timelines for further unit ramp-ups.
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