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Hawaii returns to importing gasoline cargoes after refinery closure

The products tanker St. Pauli has set out from South Korea to likely arrive with gasoline in Hawaii on June 9, the latest of a cargo-a-month lineup for the US multi-island state, which before this year had not imported full gasoline cargoes since 2013.

The uptick in imports traces back to the closure of Island Energy’s refinery on Oahu around Christmas 2018, which had in turn led to Hawaii importing its first major gasoline cargo in at least four years by New Year’s, also aboard the St. Pauli. US Customs data showed Idemitsu had brought in 99,904 barrels of premium gasoline and 201,096 barrels of gasoline on December 30, loaded out of Samil, South Korea.

On February 2, Idemitsu brought 199,701 barrels of gasoline and 90,080 of premium gasoline aboard FPMC 25. The same company imported similar amounts on March 14 aboard the Admore Sealion from South Korea, on April 8 aboard the Challenge Prime and on May 15 again aboard Challenge Prime, both times loading from Japan.

Platts trade flow software cFlow shows St. Pauli left South Korea May 27 for a June 9 unloading in Honolulu. A shipping fixture shows Idemitsu chartered it for clean products.

A source familiar with Idemitsu confirmed the company had been moving cargoes to Hawaii of late, with the cargoes consisting of “normal US spec gasoline” and that contracts were a mix of spot and term.

An analyst said the addition of imports is due to Island Energy officially closing down its Hawaii refinery before Christmas, leaving one refinery for the US island state.

“Definitely, that is something recently new,” said Andy Lipow, president of Lipow Oil Associates.

HAWAII REFINERY NEEDS
Hawaii’s two refineries had satisfied state gasoline and diesel demands for years, even before electric vehicles made inroads into the state’s transportation sector. Hawaii has a long history of jet fuel imports, however, due to its outsized airline needs.

So market sources expressed surprise to hear gasoline was coming into Hawaii along with jet fuel.

“They do a lot of jet; dump a bit in Hawaii and then on to L.A.,” one trader said. “But I didn’t know about gas.”

A second trader said the refinery closure and term nature of the flow means the imports are likely to continue at least through the year and likely longer. “The import volume continues to Hawaii,” he said.

Energy Information Administration data shows the last time Hawaii imported gasoline was just 20,000 barrels in October 2014 by Chevron, which sold its Hawaii refinery to Island Energy in 2016. Chevron also brought in 50,000 barrels in May of 2014.

Par Petroleum now owns the only refinery operating in Hawaii, having bought the 94,000 b/d Kapolei refinery from then-Tesoro in the fall of 2013. EIA data showed the last imports of full cargoes of gasoline happened right before that purchase when Tesoro imported 1.5 million barrels from May through August.

RECORD USWC GASOLINE IMPORTS
Hawaii’s recent imports have added to a record pull of gasoline in the US West Coast region that has had to deal with a heavy, long maintenance season in California and Washington state.

EIA data released Thursday showed the the PADD V region, which includes Hawaii and Alaska, brought in 254,000 b/d of gasoline for the week ended May 24, the second-highest since records started in 2004. The record import week happened just the week before, with 399,000 b/d of gasoline brought into the region, which is well over a cargo a day.

At least one more cargo arrived into Los Angeles since then. Customs data showed the Marlin Amethyst carried 304,790 barrels of blendstock by Musket from Eastern Canada, which can make the stricter California CARBOB grade.

But West Coast refineries are starting to finally return online. Refinery utilization rates reached 87% last week, the highest total in two months. West Coast gasoline stocks also gained 733,000 barrels to 28.44 million barrels, the highest total since April 5.
Source: Platts

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