New Colombian crude whets appetite of U.S. refiners -sources

By Liz Hampton and Marianna Parraga
HOUSTON, June 3 (Reuters) - The United States has started to
import small batches of Colombia's Puerto Bahia heavy crude, an
unusual development that underscores at least a temporary shift
in the type of heavy oil flowing into U.S. refineries.
Typically, U.S. refineries have received their heavy oil
from Canada, Venezuela and Mexico. But shipments of those grades
have been limited by Canada wildfires, and slipping output in
Mexico and Venezuela.
The first shipment of the Colombian heavy crude arrived at
Lake Charles, Louisiana in February co-loaded with Vasconia
crude for refiner Phillips 66 (NYSE:PSX) PSX.N , followed by a
260,000-barrel cargo in March for the same customer, according
to sources and data available from the U.S. Energy Information
Administration.
A third vessel, the Genmar Compatriot, discharged in mid-May
in New Orleans about 350,000 barrels of several Colombian
grades, including Puerto Bahia crude, according to the sources
and Thomson Reuters vessel tracking data.
The new grade, also known as PB 19, has an API gravity of
19.8 degrees and 1.6 percent of sulfur content. It is produced
in small volumes by Royal Dutch Shell RDSa.L and shipped from
Barranquilla port, according to sources.
Until now, Puerto Bahia crude had been mostly sent to
terminals in the Caribbean, where Shell mixed it with imported
naphtha to convert it to the popular Castilla heavy blend,
according to traders close to these operations.
The latest import of the heavy crude comes as a raging
wildfire in Alberta's vast oil sands region has taken out more
than 1 million barrels per day of oil production, curtailing
shipments of heavy Canadian oil to the U.S and making refiners
more open to new foreign crudes needed to combine with domestic
light sweet grades.
A spokesman for Shell declined to comment.
This year's change in flows also comes after Colombia
reshuffled its crude exports in mid-2015 to focus on marketing
its Vasconia blend, which could fetch better sale prices.
In consequence, exporting companies reduced offers of
Castilla, especially Colombia's main private producer, Pacific
Exploration and Production, which no longer launches regular
offers for it on the open market, a company source confirmed.
The last Castilla crude cargo sold by Pacific on the open
market was in December, while state-run Ecopetrol ECO.CN , the
largest producer of this grade, has also replaced Castilla sales
with lighter, more expensive Vasconia.
At the same time, recent rebel attacks on Colombia's 210,000
barrel per day Cano-Limon Convenas pipeline have disrupted
supplies of Vasconia crude.