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As one Kurdish oil tanker waits off Texas, another heads to New Jersey

DAN MURTAUGH and JACK KASKEY

PAULSBORO, New Jersey (Bloomberg) -- As a tanker filled with disputed Kurdish oil sits off the coast of Texas for a fifth day, another shipment may be making its way to the East Coast.

The Minerva Joy left Dortyol, Turkey, a port tied to Kurdish oil exports, on July 23 and is due to dock in Paulsboro, New Jersey, on Aug. 11, according to shipping data compiled by Bloomberg. It would be the sixth vessel carrying Kurdish oil to the U.S.

Two of those shipments appear to have been delivered to LyondellBasell Industries NV’s refinery in Houston. The London-based petrochemical company said July 31 it will stop purchasing Iraqi crude after an ownership dispute arose associated with the recent shipments it purchased.

“We have canceled further purchases and will not accept delivery of any of the affected crude until the matter is appropriately resolved,” the company said in a written statement. Lyondell declined to comment on any specifics about the shipments.

On July 28, the Iraqi Oil Ministry persuaded a U.S. judge to order the seizure of 1 MMbbl of oil inside a tanker anchored off Galveston, Texas, that it claims was illegally pumped from wells in Kurdistan.

The United Kalavryta is anchored 60 miles southeast of the Texas coast, as it has been since July 28, outside of U.S. territorial waters. The seizure ordered can’t be executed until it crosses that boundary. The ship loaded in Ceyhan, Turkey, where a pipeline from the Kurdish region of northern Iraq terminates.

U.S. Recognition

The U.S. officially recognizes Kurdistan as part of Iraq, although the Kurdish people have jockeyed with the Baghdad-based national government for autonomy for more than a decade. Oil revenue from the northern oil fields could fuel Kurdistan’s fight for independence.

Oil producers are working with the Kurdistan Regional Government to begin extracting the estimated 45 Bbbl of reserves in the northern territory. The Kurdish government expanded its control over the resources in early June, when Kurdish Peshmerga armed forces took control of northern Iraq’s key oil hub, Kirkuk, after militants routed the Baghdad government’s army.

The Iraqi government warned Kurdish officials to stop the exports through Turkey, which began in December, according to the complaint over the United Kalavryta. Gulf Keystone Petroleum Ltd., which says it’s the leading operator in the Kurdistan region, said in its April 28 annual report that it began exports of Shaikan crude from the Kurdish region by trucking oil to the port in Dortyol.

Axeon Refining

Two oil shipments from Dortyol reached the U.S. in May, according to U.S. Customs data. One shipment of 265,167 bbl on board the Marinoula landed in Houston May 1. The other, 265,062 bbl of oil on the Lovely Lady, landed May 28. The volumes match imports of Iraqi crude in May in Lyondell filings with the U.S. Energy Information Administration.

Several other cargoes loaded in Dortyol have landed or are en route to the U.S. The Nounou brought 254,840 bbl of crude to Philadelphia on June 6, with Axeon Specialty Products LLC listed as the notify party on the bill of lading filed with U.S. Customs. Axeon operates a 70,000-bpd asphalt refinery in Paulsboro, New Jersey.

An Axeon spokesman didn’t respond to a request for comment made by phone.

The Minerva Rita may have unloaded petroleum on June 25 and June 26 on the Houston Ship Channel after loading in Dortyol in June, according to shipping data compiled by Bloomberg.

The Minerva Joy lists Paulsboro as its destination after apparently filling with petroleum in Dortyol on July 23, according to shipping data.

08/01/2014

 

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