Abu Dhabi state Adnoc has awarded a $3.1bn contract for a long-planned Crude Flexibility Project (CFP) to enable its Ruwais West refinery to process 420,000 b/d of Upper Zakum crude, freeing up more valuable Murban crude for export.
Murban’s premium to Upper Zakum averaged $1.80/B for 2017, implying $275mn more revenues had 420,000 b/d of Murban been exported in place of Upper Zakum (MEES, 20 October 2017). Assuming identical products output post-CFP, the extra crude income implies an 11-year payback of CFP costs. And savings may be even greater given that the discount for high sulfur crude will likely widen post-2020 when the IMO tightens rules on shipping fuel sulfur content. Upper Zakum is 1.74% sulfur, Murban is 0.74%. (CONTINUED - 589 WORDS)
