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UPDATE 1-U.S. oil shipments sailing for Australia highlight growing reach

Fri, 26th Apr 2019 07:57

* Tanker to arrive at Kwinana on May 20 - data

* Second tanker to depart this week - source, data

* Four Aframaxes head to Asia in two months

* U.S. oil exports are surging: https://tmsnrt.rs/2ULQi5F(Updates route information and adds graphic on U.S. oilproduction and exports)

By Florence Tan and Devika Krishna Kumar

SINGAPORE/NEW YORK, April 26 (Reuters) - Two cargoes of U.S.crude oil have been booked to sail to Australia, trade sourcesand data companies said, highlighting the increasing globalreach of exports from the United States.

Aframax tanker Esther Spirit loaded U.S. oil in early Aprilat Enterprise Houston Terminal and is scheduled to discharge atKwinana in Western Australia on May 20, ship-tracking data fromRefinitiv and Vortexa showed.

BP Plc chartered the Silver Sun, an Aframax, to loadfrom the U.S. Gulf Coast this week to Kwinana for $2.35 million,according to a shipbroker and Refinitiv data. BP operates arefinery at Kwinana producing fuels for Western Australia.

Crude exports from the United States tend to be so-calledlight grades that yield large amounts of gasoline and dieselwhen refined, and are classified as low-sulphur, or sweet.

"Australia's aging refineries were designed to run regionalcrude that is typically light and sweet. U.S. crude is a goodsubstitute for typical Australian refinery feedstock," Refinitivanalyst Mark Tay said.

BP said it does not comment on day-to-day sales and tradingoperations.

That will be the fourth Aframax tanker in two months that isheading to Asia directly from the United States. This is anunusual move as the costs of shipping oil in an Aframax, whichcan carry about 600,000 barrels of oil, are higher than movingoil on Suezmax tankers or Very Large Crude Carriers (VLCC) thatcan carry more than 1 million barrels.

Esther Spirit could be the first ever tanker to saildirectly from the United States to Australia, said aSingapore-based trader who tracks this oil flow closely. FromHouston to Kwinana via the Cape of Good Hope is a distance of12,392 nautical miles (22,950 km).

Freight rates for Aframaxes have come off while the directshipment eliminates the need to do any ship-to-ship transfers inAsia, two trade sources said.

BP has been importing U.S. crude to Kwinana since late 2016.The oil major would usually transfer some U.S. oil from asupertanker to a smaller vessel before sending it to Kwinana,they added.

U.S. crude exports have surged to records since Washingtonlifted a ban in late 2015. U.S. crude arrivals in Asia in Mayare expected to rise to a record 38.1 million barrels, about 1.2million barrels per day, according to Refinitiv Eikon data.

Two more Aframax tankers are on their way to Vietnam andIndonesia as the southeast Asian buyers import their first U.S.oil cargoes, Refinitiv data showed.

The Almi Horizon, carrying about 340,000 barrels of U.S.oil, will arrive at the refinery in Dung Quat, Vietnam, at theend of April while Indonesia will receive its first U.S. oilcargo in June.

(Reporting by Florence Tan in SINGAPORE and Devika KrishnaKumar in NEW YORK; editing by Christian Schmollinger)

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