Egypt's SUMED Pitches Use of Pipeline as Suez Crisis Drags
LONDON (Reuters) — Egypt's SUMED pipeline operator has approached oil traders to ask if they wanted to book their system to transport crude oil as a blockage of the Suez Canal by a container ship drags, three trading sources told Reuters on Thursday.
The 400 m (430 yard) Ever Given, almost as long as the Empire State Building is high, is blocking transit in both directions through one of the world's busiest shipping channels for oil and grain and other trade linking Asia and Europe.
Traders have had to replace some empty tankers that were due to head north through the canal to pick up Mediterranean crude. Otherwise, many are gambling that the situation will resolve itself over the next few days.
"Rerouting via the Cape (Africa) could cost about $400,000 extra in freight plus you need to factor in 2-3 weeks of extra travel time," a shipping source said on condition of anonymity.
"At the moment, it's not costing charterers any money...the closure will affect delivery time but there is no demurrage because there is no clause for the Suez being shut."
SUMED links the Red and Mediterranean Seas with a capacity of over 2.5 million barrels per day. About 1.3 million bpd flowed through the system in 2018, the U.S. Energy Information Administration said.
The pipeline is majority-owned by Egypt's state oil company EGPC while Saudi Aramco, the Kuwait Investment Authority and Qatar Petroleum have smaller shares.
Related News
Related News
- Kinder Morgan Proposes 290-Mile Gas Pipeline Expansion Spanning Three States
- Valero Plans to Shut California Refinery, Takes $1.1 Billion Hit
- Three Killed, Two Injured in Accident at LNG Construction Site in Texas
- Tallgrass to Build New Permian-to-Rockies Pipeline, Targets 2028 Startup with 2.4 Bcf Capacity
- TC Energy Approves $900 Million Northwoods Pipeline Expansion for U.S. Midwest
- U.S. Pipeline Expansion to Add 99 Bcf/d, Mostly for LNG Export, Report Finds
- Enbridge Adds Turboexpanders at Pipeline Sites to Power Data Centers in Canada, Pennsylvania
- Great Basin Gas Expansion Draws Strong Shipper Demand in Northern Nevada
- Cheniere Seeks FERC Approval to Expand Sabine Pass LNG Facility
- Heath Consultants Exits Locate Business to Expand Methane Leak Detection Portfolio
Comments