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PDVSA to replace Orimulsion with heavy fuel oil: PowerSeraya
Platts
Singapore
Petroleumworld.com 10 31 06
Venezuelan state oil company PDVSA will supply PowerSeraya with heavy fuel
oil as an alternative to Orimulsion under its Orimulsion supply contract with
the Singapore power utility. PDVSA will no longer produce its trademark
bitumen-based fuel Orimulsion, after December 31.
"PDVSA/Bitor is meeting the intent of our fuel supply agreement through
supplying an approved heavy fuel oil alternative...as the same economics as
Orimulsion," PowerSeraya said in a statement issued Tuesday.
Venezuela had been scaling back the production of Orimulsion and recently
said it would halt output completely at the end of this year, sparking concern
among power utilities and other buyers of the fuel in Asia that their
long-term contracts with PDVSA would be left in the lurch.
PowerSeraya, the second largest generator in Singapore, was the first
utility in the country to use Orimulsion as feedstock for its power plants. It
received its first cargo in April 2005.
Under a 10-year contract, PowerSeraya was to take take delivery of 1.8
million mt of Orimulsion each year from PDVSA Bitor, a unit of PDVSA.
Orimulsion is an emulsification fuel composed of 70% natural bitumen and
30% water. It is used mostly in power plants in South Korea, Japan, China,
Denmark and Italy.
"PowerSeraya confirms it is engaged in an open dialogue with
PDVSA/Bitor... However, until these discussions are concluded, it would be
premature for us to comment further on this matter," PowerSeraya said, without
elaborating on the specification of the heavy fuel oil to be supplied or the
details on price and quantity.
It was not immediately known if power utilities in South Korea and Japan
that have long term contracts with PDVSA are also holding discussions with the
Venezuelan company.
Canada's New Brunswick Power in August 2005 filed a lawsuit against Bitor
for failing to supply Orimulsion to its 1,030 MW Coleson Cover power plant.
Under the terms of the contract that was apparently signed by NB Power but
never signed by PDVSA, Bitor was to have begun supplying NB Power with
Orimulsion in early 2005.
--Calvin Lee, calvin_lee@platts.com
Platts 31 10 06
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