LOTOS purchased another cargo of US oil. A tanker carrying 650,000 barrels (i.e. about 80,000 tonnes) of US WTI Midland crude is on its way to Naftoport in Gdańsk. The transaction is in line with LOTOS’s consistently pursued strategy for diversification of supply sources. All decisions to purchase crude oil are taken on a case-by-case basis, taking into account the technological and economic effectiveness. At present, every fifth barrel of oil processed by the Grupa LOTOS Gdańsk refinery is imported from sources other than markets east of Poland.
The tanker has already left the port of Freeport near Houston, Texas, at the Gulf of Mexico, and is expected to reach Gdańsk in mid-December.
It is the second consignment of oil from the US to LOTOS and another one from North America. In November, the Company imported 600,000 barrels of Domestic Sweet (DSW) crude from the US, and in September – nearly 700,000 barrels of Hibernia crude from Canada.
Photo: First cargo of US crude oil for Grupa LOTOS being transported to Naftoport in Gdańsk, November 2017.
LOTOS is consistently pursuing its strategy of diversifying supply sources. At present, every fifth barrel of oil processed by its refinery in Gdańsk is imported from sources other than markets east of Poland. In September, for the first time in over 40 years of the Company’s history, LOTOS imported oil from Canada. Earlier, LOTOS tested crude oil from Iran, Saudi Arabia, Latin America and North and West Africa. All this came as a result of the Company’s continuous efforts to increase Poland’s energy security.
With access to a seaport, Grupa LOTOS is able to adopt a flexible approach and purchase a wide range of oil grades from across the world. Before a new type of crude is bought, LOTOS Technology Office experts analyse its characteristics. It is vital to make sure that processing is economically viable in the existing market environment. This is not only about price but also about the volume of high-margin products that can be obtained.
LOTOS has already tested nearly 200 oil types and the number is steadily growing. Each testing has several stages. First, the oil is checked based on comprehensive quality assessment reports (assays) provided by the producer. When the oil is received at the refinery, its sample is first tested at a state-of-the-art laboratory of LOTOS Lab, a company that serves as a research and development centre as well as a business and technological incubator of new innovative projects at the LOTOS Group. The specialist equipment used by LOTOS Lab for comprehensive measurement of crude oil allows it to precisely check the properties of a given blend in specific fractions, which are critical for the quality of operation of the key production units. Importantly, this modern laboratory can make an objective comparison of various types of crude in the same external conditions.
Only the most advanced refineries are able to process a wide range of crude types, and the LOTOS Gdańsk refinery surely is one of them. Following the completion of further investment projects, the refinery is now capable of processing a greater number of crude types imported under spot contracts. The ongoing EFRA project, worth over PLN 2.3bn, will further increase this flexibility. When completed, the project will help the Company to significantly reduce production of heavy fuel oil and turn out approximately 900,000 tonnes of high-margin products more, which ultimately is expected to deliver an additional margin of about USD 2 per barrel.
Communication Office, Grupa LOTOS S.A., ul. Elbląska 135, 80-718 Gdańsk, Poland, tel. (+48) 58 308 87 31, (+48) 58 308 83 88, (+48) 58 308 83 55, e-mail: email@example.com