By Ediri Ejoh
There are indications that Nigeria’s newest crude from Egina has emerged as one of the country’s flagship main export crudes in less than two years, as refiners prize its versatility and reliability, according to Platts.
It would be recalled that the 200,000 barrels daily, b/d, Egina deepwater field came on stream in late December 2018, providing a near 10 per cent boost to Nigerian crude production.
Since then the grade has proved very popular among global refiners due to its high distillate yields, and has consistently been among the most expensive crudes in West Africa and the Atlantic Basin.
The trading report stated that “As a relatively new offshore FPSO [Egina] should be intrinsically reasonably reliable. I think the value in Egina (in normal times) comes more from its high gasoil cut on distillation.”
“But it shouldn’t be commanding the same kind of premiums as it usually does. Azeri Light [and other such grades] are in the same boat at the moment.”
However, Egina is a little different from other Nigerian crudes. Most Nigerian crudes like Quai Iboe and Forcados are light and sweet, (below 0.6 per cent sulfur) and boast a high gasoline and distillate mix (with a specific gravity of over 34 API).
Egina is sweet (0.17 per cent sulphur), but it is a medium grade (27.30 API), which means it has a very strong gasoil and diesel content.
This is why the crude proved very popular on the lead up to the International Maritime Organization’s sulfur cap that came into place on January 1.
Prices of this crude like many other grades have however swivelled dramatically in the past year as the coronavirus pandemic thwarted oil demand, especially for crudes rich in distillates like diesel, jet fuel and gasoil.
Nigeria’s Egina in fact outperformed other medium sweet grades ahead of IMO 2020 but prices came back to earth in 2020 as buyers fell out of love with such grades due to the sharp fall in distillate cracks.
Egina values reached a record high of Dated Brent plus $4.90/b on December 17 but a few months later amid the peak of the pandemic, it was trading at a discount of $5.05/b.
Prices have recovered since then but with diesel remaining oversupplied, differentials are still under pressure.
Egina was at a premium of $0.05/b to Dated Brent on October 1, according to Platts data.