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Terminal News


Terminal News
November 7, 2017
Investment analysis for oil terminals
Channoil Consulting's Charles Daly provides an overview of some of the key factors investors look for when considering a terminal transaction The logistics of the oil industry depend, to a material extent, on the location and capacity of oil terminals...

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Channoil Consulting's Charles Daly provides an overview of some of the key factors investors look for when considering a terminal transaction

The logistics of the oil industry depend, to a material extent, on the location and capacity of oil terminals.

These can be sea-fed by oil tankers or inland and fed by block train, road tanker or pipeline. No matter where they are located they have a value in the supply chain. These installations therefore have an intrinsic value both to the current owner and to potential entrants into the supply chain, either as traders or marketers. Nowadays we have seen this interest extend to investment funds and pension funds.

In this process the financial advisors and the technical and commercial advisors will be involved in establishing a fair value for the target.

Location

Most people will have heard the expression 'location, location, location' as applied to the purchase of residential property. This applies equally, if not more so, for oil terminals. In supply chain logistics for other businesses you will note that location of distribution warehouses is critical to the overall profitability of the whole concern. In oil logistics a terminal may not be as easily sited strategically, primarily due to environmental concerns and the desire to keep oil installations away from centres of high population density.



Size

The size of the terminal is critical to the valuation. If the terminal is for local market distribution, where there is usually no spare capacity to allow for growth, an evaluation of the potential for acquiring additional land must be made. A terminal that is only used for supplying a given market has limited flexibility and therefore can only be evaluated in the context of the local market. The durability of that demand therefore governs the value.

For an independently operated international warehouse, the size becomes more of an issue. Today cargo sizes have become bigger and bulk building and bulk breaking are an important function of an oil terminal. Given this, in order to satisfy the demand of more than one customer, such a terminal will need to be of a minimum size. Current sizing of terminals is from about 350,000 m3 to 1,200,000 m3. This size of terminal needs enormous tracts of land and waterfront. To give you an example, a terminal of about 350,000 m3 will need a minimum land area of 10-15 hectare (25-38 acres), and at least three or four jetties.

Jetty

A coastal terminal will require jetty capacity based on the estimated utilisation. If it is to be a local market depot, then there will be only a one-way traffic in by sea and out by rail or road tanker or even pipeline. There is an exception for terminals that supply their markets further inland by river barges, since these will require barge berths to operate.

If the terminal is large, such as at a refinery or an independent international warehouse, then there will be a number of jetties of different sizes for the various services.

The jetties are the aortas of the terminal and any restriction here would diminish the value considerably.

Market

The size of the current and forecast market is one of the most critical pieces of information required to assess the value of an oil terminal.

Age

The age of the terminal will naturally have an impact on the value. Age will be reflected in the amount of pollution in the land due to spillage and leakage in the past. The other aspect of age will be the corrosion to the tank and pipeline walls. Petroleum products tend to have relatively high acidity content; older terminals tend to suffer correspondingly higher levels of corrosion due to higher sulphur contents in the past. Ultrasound testing measures the thickness of the tank and pipe walls and will therefore give a fairly accurate estimate of the useful life of the terminal.

Health & safety

Following on from the age of the terminal, the safety equipment in place would probably need upgrading in the case of an old terminal. All terminals must meet the appropriate legislation in the territory they are located in. Although regulations may be less onerous in certain countries, it usually behoves the terminal owner to meet the most stringent regulations existing in the international oil industry, as any lesser standard will make them unacceptable to the major users, thus giving limited flexibility for resale and use.

Environmental issues

As stated before, oil terminals are usually sited as far away from residential areas as is possible. There are two reasons for this, one is the obvious one of fire hazard and the other is noxious smells. Oil terminals are usually subject to an operating licence and this licence must be renewed periodically.

Daly will be talking more about what investors looks for in a terminal on the second morning of the Tank Storage Germany conference on November 29 and 30. For more information, visit www.tankstoragegermany.com.



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Terminal News
November 6, 2017
Royal Dutch Shell has completed the sale of its Gabon onshore oil and gas interests, including pipeline and storage assets, to Assala Energy for $628 million.The transaction comprises all of Shell's onshore oil and gas operations including five operated fields, four non-operated fields the onshore pipeline system from Rabi to Gamba and the Gamba Southern Export terminal...

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Royal Dutch Shell has completed the sale of its Gabon onshore oil and gas interests, including pipeline and storage assets, to Assala Energy for $628 million.

The transaction comprises all of Shell's onshore oil and gas operations including five operated fields, four non-operated fields the onshore pipeline system from Rabi to Gamba and the Gamba Southern Export terminal.

Shell onshore in Gabon produced around 41,000 barrels of oil equivalent per day in 2016.

Shell says that the completion of this deal is in line with Shell's drive to simplify the upstream portfolio and re-shape the company into a world class investment.



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Terminal News
November 6, 2017
Vopak’s financials affected by lower occupancy rates
Vopak has experienced a decrease in its third quarter EBITDA figures as a result of lower occupancy rates.The company reports that its EBITA decreased by 9% to $571 million, in line with its previous guidance of a 5-10% lower 2017 EBITDA.However, its occupancy rate of 90% is supported by sound business drivers in all the product-market segments throughout its network...

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Vopak has experienced a decrease in its third quarter EBITDA figures as a result of lower occupancy rates.

The company reports that its EBITA decreased by 9% to $571 million, in line with its previous guidance of a 5-10% lower 2017 EBITDA.

However, its occupancy rate of 90% is supported by sound business drivers in all the product-market segments throughout its network. It says in its third quarter financials that the difference with the high 2016 occupancy rate of 94% is primarily due to a less favourable oil market structure.

Compared to the second quarter of 2017, Vopak's third quarter EBITDA decreased by 8%, mainly driven by lower revenues in Asia and high other expenses, among others related to jetty damage in Singapore. Revenues in the Netherlands remained stable.

The majority of the current projects currently under construction, amounting to 3.2 million m3, are backed by commercial storage contracts, and will start to contribute positively during 2019.

It says that the successful realisation of its efficiency programme in the 2017-2019 period will help reduce its future cost base by at least $25 million.



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Terminal News
November 3, 2017
Magellan remains focused on expansion opportunities as it reports an increase in its third quarter financials.The company reports a net income of $198.5 million compared to $194.6 million in the third quarter of 2016. During this quarter the company's operations in Houston and Corpus Christi were disrupted due to Hurricane Harvey...

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Magellan remains focused on expansion opportunities as it reports an increase in its third quarter financials.

The company reports a net income of $198.5 million compared to $194.6 million in the third quarter of 2016. During this quarter the company's operations in Houston and Corpus Christi were disrupted due to Hurricane Harvey. No significant asset damage occurred and the impacted facilities are now operational.

Michael Mears, CEO, says: 'Magellan generated financial results during the third quarter of 2017 that were consistent with our expectations despite Hurricane Harvey, which negatively impacted the operations of each of our business segments for a period of time.

'Further, the third quarter of 2017 was also notable because we launched three new large-scale construction projects for fee-based refined products and crude oil pipeline and storage assets that increased our expansion capital spending by $600 million, helping to solidify Magellan's future growth.'

Based on the progress of expansion projects already underway, the company expected to spend $600 million in 2017, $800 million in 2018 and $350 in 2019.

These estimates includes its projects to expand its Pasadena, Texas marine storage terminal, to build a crude oil and condensate pipeline from the Delaware Basin to the origin of the Longhorn pipeline in Crane, Texas and to expand its refined products pipeline system in Texas.

The estimates also include the construction of an incremental 1.5 million barrels of crude oil storage in Cushing, Oklahoma and Corpus Christi on a combined basis, which is supported by customer commitments.

The company also continued to evaluate in excess of $500 million of potential organic growth projects as well as acquisition opportunities.



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Terminal News
November 2, 2017
Ineos acquires Forties Pipeline System from BP
Ineos has completed the purchase of the Forties Pipeline System (FPS), including associated pipelines, plants and storage terminals, from BP.Thw 235-mile pipeline system linked 85 North Sea oil and gas assets to the UK mainland as well as to the Ineos site in Grangemouth, Scotland...

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Ineos has completed the purchase of the Forties Pipeline System (FPS), including associated pipelines, plants and storage terminals, from BP.

Thw 235-mile pipeline system linked 85 North Sea oil and gas assets to the UK mainland as well as to the Ineos site in Grangemouth, Scotland. This system delivers almost 40% of the UK's North Sea oil and gas production.

Ineos now owns and operates FPS, the Kinneil gas processing plant and oil terminal, the Dalmeny storage and export facility, sites at Aberdeen, the Forties Unity Platform and associated infrastructure.

Andrew Gardner, CEO of Ineos FPS says: 'Our acquisition of the Forties Pipeline System and associated assets together with its highly skilled workforce is significant and strategic.

'It demonstrates Ineos' commitment to securing a competitive long-term future for this critical piece of oil and gas infrastructure and provides the platform to potential future offshore Ineos investments.'

This deal consolidates the company's position at a top ten company in the North Sea.



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Terminal News
November 2, 2017
American Midstream acquires Southcross storage assets
American Midstream Partners has agreed to acquire certain assets from Southcross Holdings including pipelines and storage facilities.Additionally, American Midstream has proposed to merge Southcross Energy Partners into a wholly owned subsidiary of American Midstream Partners...

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American Midstream Partners has agreed to acquire certain assets from Southcross Holdings including pipelines and storage facilities.

Additionally, American Midstream has proposed to merge Southcross Energy Partners into a wholly owned subsidiary of American Midstream Partners. These agreements form two separate transactions totalling $815 million.

Once complete, American Midstream will own and operate integrated midstream infrastructure including:

- 8,000 miles of crude, natural gas and NGL pipelines

- Ten processing plants with more than 1.0 Bcf/d of capacity

- 6.7 million barrels of above-ground liquids storage capacity

Lynn L. Bourdon III, chairman, president, CEO of American Midstream, says: 'This transaction accelerates our transformation into a fully integrated gathering, processing and transmission company focused in select core areas.

'The addition of the Southcross assets allows us to capture the full midstream value chain in the very prolific Eagle Ford basin. The transaction represents a unique opportunity to expand our onshore gathering, processing and transmission services, linking supplies from the economically attractive Eagle Ford shale to high demand growth markets along the Gulf Coast.'



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Terminal News
November 2, 2017
Plains and CVR Refining form pipeline JV
CVR Refining and Plains All American Pipeline have formed a joint venture to acquire a 100-mile pipeline system.The joint venture – Midway Pipeline – acquired the Cushing to Broome pipeline system from Plains. The pipeline connected CVR Refining's Coffeyville, Kansas, refinery to the Cushing hub...

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CVR Refining and Plains All American Pipeline have formed a joint venture to acquire a 100-mile pipeline system.

The joint venture – Midway Pipeline – acquired the Cushing to Broome pipeline system from Plains. The pipeline connected CVR Refining's Coffeyville, Kansas, refinery to the Cushing hub.

Midway will contract with Plains to continue its role as operator of the pipeline.

Separately, CVR and Plains announced that CVR will acquire the Cushing to Ellis crude oil pipeline system from Plains. This system helps link CVR's 70,000 barrel-per-calendar day Wynnewood, Oklahoma refinery to Cushing. This acquisition is expected to close in the fourth quarter of 2017.

Jack Lipinski, CEO of CVR Refining, says: 'These acquisitions ensure long-term access to Cushing-based crude oil for our Coffeyville and Wynnewood refineries, securing our mid-continent edge of sourcing price-advantaged crude.'



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Terminal News
November 2, 2017
Fujairah: Oil product stocks down 1.1% on week
Total refined product stocks at the UAE port of Fujairah stood at 15.895 million barrels in the week to October 30, down 1.1% from the previous week, according to data from the Fujairah Energy Data Committee (FEDCom).While in absolute terms the week on week change was relatively small, stocks of light and middle distillates fell to their lowest levels since the start of Fujairah stocks reporting, S&P Global Platts Analytics said in a report...

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Total refined product stocks at the UAE port of Fujairah stood at 15.895 million barrels in the week to October 30, down 1.1% from the previous week, according to data from the Fujairah Energy Data Committee (FEDCom).

While in absolute terms the week on week change was relatively small, stocks of light and middle distillates fell to their lowest levels since the start of Fujairah stocks reporting, S&P Global Platts Analytics said in a report.

Stocks of light distillates fell by 2.5% week on week to 4.266 million barrels, the data showed. The petrol market is resisting the usual seasonal demand slump in the fourth quarter due to healthy regional demand, according to Platts Analytics. European barrels, which usually flow to the Middle East, have instead been going to West Africa due to very healthy demand there. In Asia, recent tenders from Indonesia, Vietnam and Sri Lanka have added to regional demand.

Stocks of middle distillates fell by 9.5% week on week to 2.245 million barrels, the data showed.

Stock levels remained below 3 million barrels for the seventh week in a row, although supply fundamentals could lean towards more supply and higher stocks levels over the next few months, Platts Analytics said.

Additional spot supplies of gasoil have emerged as the bulk of current refinery maintenance in both the Middle East and Asia will soon be completed, it added. Stocks of heavy distillates and residues rose by 1.8% to 9.384 million barrels, but remained below 10 million barrels for a fifth consecutive week.

The fourth quarter typically sees a pickup in regional bunker demand, but demand in Fujairah is likely down year on year due to regional politics and reduced regional crude exports due to OPEC production cuts, Platts Analytics said.



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Terminal News
November 1, 2017
Blueknight Energy Partners is set to acquire two asphalt storage facilities in Oklahoma and Georgia for $32.5 million.The facility in Bainbridge, Georgia, will be acquired from Ergon Asphalt & Emulsions and Ergon Terminalling. As part of the deal, Ergon will assign a long-term storage, throughput and handling agreement with a third-party for the facility...

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Blueknight Energy Partners is set to acquire two asphalt storage facilities in Oklahoma and Georgia for $32.5 million.

The facility in Bainbridge, Georgia, will be acquired from Ergon Asphalt & Emulsions and Ergon Terminalling. As part of the deal, Ergon will assign a long-term storage, throughput and handling agreement with a third-party for the facility.

The Muskogee, Oklahoma facility will be acquired from Frontier Terminal and Cummins Investment Corporation. Blueknight has entered into two third-party storage, throughput and handling agreements associated with the Muskogee terminal.

Both transactions are expected to close in the fourth quarter. Once complete, Blueknight will then own a network of 56 asphalt terminals with a combined capacity of 10.3 million barrels of asphalt and residual fuel oil storage.

The Bainbridge terminal has 200,000 barrels of storage and comes with a long-term contract with a credit-worthy third-party customer. The Muskogee terminal include 500,000 barrels of storage and 245 acres of property, 150 of which the company expects to develop further in the future. The company has entered into two long-term storage, throughput and handling contracts with credit-worthy third-party customers.

Mark Hurley, Blueknight's CEO, says: 'These acquisitions primarily represent the reinvestment of proceeds received from 2017 asset sales and include high-quality, long-term contracts at very reasonable acquisition multiples.'



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Terminal News
October 31, 2017
Sinopec considering US storage projects
Sinopec is considering two US projects to expand storage facilities in the Caribbean and boost Gulf Coast crude oil exports.According to sources quoted by Reuters, one of the projects could involve the company partnering with Freepoint Commodities and ArcLight Capital Partners...

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Sinopec is considering two US projects to expand storage facilities in the Caribbean and boost Gulf Coast crude oil exports.

According to sources quoted by Reuters, one of the projects could involve the company partnering with Freepoint Commodities and ArcLight Capital Partners.

This comes ahead of a business delegation visit by President Donald Trump next week.

The sources have said that the three companies are considering building a pipeline to move shale oil from the Permian basin to the Gulf Coas t. They also said this project also includes the construction of a two million barrel crude oil terminal on a VLCC.

Additionally, Reuters reports that the firms have been exploring an expansion of oil storage at Limetree Bay Terminal in the US Virgin Islands.



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Terminal News
October 30, 2017
New storage terminal for Costa Rica
A new liquid bulk storage terminal is being built in the Port of Caldera, Costa Rica.Caldera Liquid Terminal will be the first terminal to store solvents, alcohol and oils from March 2018 in the port.In its first phase, the $4.6 million terminal will comprise six tanks with 800 m3 of capacity...

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A new liquid bulk storage terminal is being built in the Port of Caldera, Costa Rica.

Caldera Liquid Terminal will be the first terminal to store solvents, alcohol and oils from March 2018 in the port.

In its first phase, the $4.6 million terminal will comprise six tanks with 800 m3 of capacity. This is due to be operational next February.

Work on its second phase will start in April 2018, and is due to be complete by August 2018. This will comprise four additional tanks, each 800 m3. The terminal will offer facilities for the storage and manipulation of bulk liquids.

Fernando Odio, president of the terminal, is reported as saying: 'Costa Rica does not have this kind of infrastructure in the Pacific, although it already does in the Atlantic Coast.

'The main goal is for national and international companies to import liquid bulk products, store them near the port, and distribute them by means of tankers to their respective factories.'



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Terminal News
October 27, 2017
Valero Energy Partners acquires Port Arthur storage assets
Valero Energy Partners (VLP) has acquired a Port Arthur storage terminal from Valero Energy Corporation.The Port Arthur terminal, which VLP has purchased for $508 million, comprises 47 tanks with 8.5 million barrels of storage capacity for crude oil, intermediates and refined petroleum products, which support Valero's Port Arthur refinery...

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Valero Energy Partners (VLP) has acquired a Port Arthur storage terminal from Valero Energy Corporation.

The Port Arthur terminal, which VLP has purchased for $508 million, comprises 47 tanks with 8.5 million barrels of storage capacity for crude oil, intermediates and refined petroleum products, which support Valero's Port Arthur refinery.

The acquisition also include the Parkway Pipeline – a refined products pipeline – which links Valero's St. Charles refinery with the Plantation and Colonia pipeline system in Collins, Mississippi. It has 110,000 barrels per day of capacity, with the ability to expand to more than 200,000 barrels per day.

The transaction is expected to close on November 1.

Joe Gorder, CEO OF VLP's general partners, says: 'We are pleased to continue growing VLP's footprint in the Gulf Coast region.

'This transaction, combined with our organic growth projects, and strong distribution coverage, positions the partnership well to deliver its targeted distribution growth without the need for additional acquisitions.'



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Terminal News
October 26, 2017
Fujairah: Oil product stocks down 6.9% on week
Total refined product stocks in Fujairah stood at 16.08 million barrels in the week to Monday, October 23, down 6.9% from the previous week led by a large draw in light distillate stocks, according to data from the Fujairah Energy Data Committee (FEDCom)...

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Total refined product stocks in Fujairah stood at 16.08 million barrels in the week to Monday, October 23, down 6.9% from the previous week led by a large draw in light distillate stocks, according to data from the Fujairah Energy Data Committee (FEDCom).

Stocks of light distillates at the UAE hub fell by 23.5% week on week to 4.376 million barrels - their lowest total since January 16, driven by continued demand for petrol from Iran as well as for naphtha from Asia, S&P Global Platts Analytics said in a report.

Demand for petrol is currently strong in the Middle East, while supply has been tight due to partial maintenance closures this month at a number of refineries including Petro Rabigh (Saudi Arabia), ORPIC (Oman) and Qatar Petroleum.

Meanwhile, Iran is seeing reduced domestic petrol output due to lower condensate supply as a result of maintenance at the South Pars fields. Stocks of middle distillates fell by 14% to 2.481 million barrels and stock levels remained below 3 million barrels for a sixth week in a row, as regional supply has been impacted by both refinery maintenance and a pull on gasoil from the West, Platts Analytics said.

Stocks of heavy distillates and residues rose by 6.3% to 9.221 million barrels, but remained below 10 million barrels for a fourth week in a row. Stock levels have been drawn down this month partly due to heavy flows of fuel oil to Pakistan. Pakistan State Oil has tendered for a lower total of 195,000 mt of fuel oil loading from Fujairah in November compared to October (520,000 mt), which could see stock levels rise from recent lows.



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Terminal News
October 26, 2017
Saudi Aramco buys stake in Rotterdam storage terminal
Gunvor is selling its stake in the Maasvlakte Olie Terminal in Rotterdam to a subsidiary of Saudi Aramco.Gunvor, one of the largest international trading houses, acquired its stake in the terminal through its acquisition of Gunvor Petroleum Rotterdam in 2016...

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Gunvor is selling its stake in the Maasvlakte Olie Terminal in Rotterdam to a subsidiary of Saudi Aramco.

Gunvor, one of the largest international trading houses, acquired its stake in the terminal through its acquisition of Gunvor Petroleum Rotterdam in 2016. The sale to Aramco Overseas Company (AOC) is part of Gunvor's strategy to further develop its Rotterdam refining operations.

The sale is due to be completed by the end of October.

AOC's investment in the terminal, which is one of the largest oil facilities in the world, will add to its current participation in other facilities in the same area, allowing for expanded offerings in the North West Europe refining hub.

It will complement Saudi Aramco's export activities in Europe, strengthen the company's supply chain and enhance its customer services in the region.

The facility is a joint venture between a consortium including ExxonMobil, BP, Shell and Vopak.



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Terminal News
October 25, 2017
Unplanned supply disruptions at lowest level for five years
Unplanned global supply disruptions fell to the lowest level since January 2012 in September.According to the EIA, over the past six months, unplanned oil supply disruptions have fallen by more than 1.0 million barrels per day, as outages in Libya, Nigeria and Iraq decline...

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Unplanned global supply disruptions fell to the lowest level since January 2012 in September.

According to the EIA, over the past six months, unplanned oil supply disruptions have fallen by more than 1.0 million barrels per day, as outages in Libya, Nigeria and Iraq decline.

Additionally, Canada's disrupted supplies, which reached their peak in April 2017 at 425,000 barrels per day, returned to production in August 2017.

In Libya, rival armed factions have blockaded pipelines and export terminals intermittently since the fall of Gadhafi and his regime in 2011. In fact, the country has had some success in reducing unplanned outages. Crude oil production has restarted at a number of oil fields in the country since the beginning of the year.

However, despite this success, Libya's outages have fluctuated since the summer as a result of repeated flare-ups of disputes between rival groups, pipeline blockades, power failure and other technical issues.

In Nigeria, disruptions fell from an average of 370,000 barrels per day in April to 200,000 barrels per day in September, in part as a result of the Trans Forcados crude oil export pipeline resuming production.

In Iraq, despite disruptions falling to 50,000 barrels per day in September, the outlook for its oil supply from the Kirkuk oil fields remains uncertain due to an offensive by Iraqi security forces in response to the autonomous Kurdistan Regional Government's independent referendum in September.

Outages in non-OPEC member countries have mainly been linked to weather events. A fire at Syncrude's Mildred Lake facility in Canada forced a complete shut down in production, along with outages elsewhere.

Us production also experienced shut-ins as a result of Hurricane Harvey in August.



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