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LOTUS to receive second US crude oil shipment

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Hydrocarbon Engineering,

A tanker carrying 650 000 bbls (approximately 80 000 t) of US WTI Midland crude is on its way to Naftoport in Gdansk, Poland. LOTUS purchased the US oil in line with its strategy for diversification of supply sources. The company makes all decisions to purchase crude oil on a case-by-case basis, taking into account technological and economic effectiveness. At present, every fifth barrel of oil processed by the Grupa LOTOS Gdansk refinery is imported from sources other than markets east of Poland.

The tanker has already left the port of Freeport, Texas, and is expected to reach Gdansk in mid-December.

This is the second consignment of oil from the US to LOTOS and another one from North America. In November, the company imported 600 000 bbls of domestic sweet (DSW) crude from the US, and in September – nearly 700 000 bbls of Hibernia crude from Canada.

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, the company’s experts analyse its characteristics. It is vital to ensure 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. The specialist equipment used 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 advanced refineries are able to process a range of crude types, and the LOTOS Gdansk refinery is one of these. Following the completion of further investment projects, the refinery is capable of processing a greater number of crude types, imported under spot contracts. The ongoing project, worth over PLN2.3 billion, 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 t of high-margin products more, which ultimately is expected to deliver an additional margin of about US$2/bbl.

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