The Sture oil terminal in western Norway was shut down and evacuated early this morning (November 8) after a Maltese oil tanker and a Norwegian military frigate collided in this key North Sea oil port at 4am local time. Rystad Energy anticipates that approximately 365,000 bpd of oil production will be shut in for several days before the terminal is again ready to receive oil piped from offshore fields in the Norwegian sector of the North Sea.
The frigate Helge Ingstad sustained severe damage in the collision, which occurred only about 15 minutes after the tanker TS Sola, carrying about 600,000 barrels of oil, set sail under tow from Equinor’s Sture terminal. The frigate moved to an inshore location and was listing heavily at 11:30am, amidst emergency efforts to prevent the vessel from sinking.
The Sture oil terminal, which has about 6 million barrels of underground oil storage capacity, is the receiving terminal for Oseberg Blend (105,000 bpd impacted) and Grane Blend (260,000 bpd impacted). The largest contributors to Grane Blend are the Grane, Ivar Aasen and Edvard Grieg oil fields. Rystad Energy estimates that production from affected fields will be impacted for five to seven days. The infrastructure at the terminal itself has not been affected and the shut-down appears to be precautionary. Nevertheless, the outage will likely reduce the daily average production of Oseberg Blend and Grane Blend in November 2018 by approximately 85,000 bpd.
Per Magnus Nysveen, Head of Analysis at Rystad Energy, expects two to three cargoes to be delayed from Sture, causing only a brief upwards impact on Brent prices. “The risk of prolonged shut-down and delayed resumption of operations is deemed to be low, although oil markets will face difficulty replacing Grane heavy oil blend during November,” Nysveen said.
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