Reuters: Petrochemicals from Venezuela unloaded in US despite US sanctions

Venezuelan petrochemicals produced by joint ventures between state-owned Pequiven and foreign partners have reached the United States, despite Washington’s efforts to restrict trade with Caracas.

According to a Reuters report, at least two shipments of methanol, a widely used industrial product whose prices have soared this year, have been unloaded at Houston ports since October, according to tanker monitoring and U.S. customs data.

The move marks a new attempt by Venezuela to boost its revenue despite US sanctions on its oil industry that have cut vital crude exports to a 77-year low.

Mitsubishi Corp. resumed methanol exports to the United States in 2021 from the Metor consortium in Venezuela after a two-year suspension, a Mitsubishi spokesman told Reuters. Metor shareholders include Petroquimica de Venezuela, or Pequiven.

Venezuela’s main oil port, Jose, was cited as a point of origin in U.S. customs records for one of the two shipments of methanol, but both sailed directly from Venezuela, according to Refinitiv Eikon monitoring data.

The names of buyers and sellers for the two methanol consignments that arrived in Houston were deleted from U.S. customs data provided to Reuters by consulting firm IHSMarkit.

The US Treasury Department and the US Customs and Border Protection declined to comment.

Pequiven, which did not respond to Reuters requests for comment, said on Twitter in July that Metor was exporting methanol to Europe, South America and Asia.

“Metor should not be subject to sanctions,” said Daniel Pilarski, a U.S. law firm specializing in cross-border trade and commerce.

“However, if Pequiven was the final producer of methanol, then there could be a risk that any shipment to the United States would be treated as an indirect receipt of goods by Pequiven, which would be a breach, even if Pequiven never received payment.” , said Pilarski.

Companies exporting methanol from Venezuela to the United States could be licensed by the US Treasury Department to allow trade or take other measures to ensure Pequiven is not treated as an indirect seller, he said.

Methanol, produced in Venezuela from natural gas, is found in everyday products such as gasoline, paints, carpets and plastics.

On October 7-11, the PVT Aurora tanker unloaded approximately 16,900 metric tons of methanol from Venezuela to Texas. Part of the cargo was transported from the Deer Park chemical terminal of the Intercontinental Terminals Company (ITC), according to data from Refinitiv Eikon.

The Vietnam-flagged ship sailed from the port of Jose, which serves PDVSA and Pequiven.

A second cargo of 20,000 tonnes of methanol from Venezuela followed a similar route in November with the tanker Sakura Advance, which unloaded part of its cargo in Houston on November 11-13 and another cargo in the port of Southern Louisiana a few days later, according to Eikon data.

Italy’s Eni also produces methanol in Venezuela through Supermetanol, a half-owned company with Pequiven.

Pequiven and PDVSA have increased exports of petrochemicals and petroleum by-products that are not as expensive as crude and until recently were not a priority, as an analysis of internal data by the two companies showed.

US sanctions and warnings to Venezuela’s traditional buyers of crude oil have sharply reduced PDVSA exports in recent years.

But shipments of petrochemicals and petroleum by-products have increased, including exports of methanol, sulfur, urea, natural gasoline, light virgin naphtha and petroleum coke, according to the data.

Low prices offered to buyers for petrochemicals from Venezuela have boosted exports, generating revenue that has been used in part by some of Pequiven consortia to reopen and upgrade plants.

“The factories are in the process of recovering, as sales revenue has allowed it,” an anonymous source told Reuters. “Even the United States is opening its doors to Venezuelan methanol.”

From January to October, PDVSA and Pequiven exported about 1.75 million tonnes of petrochemicals and by-products, roughly doubling exports for the whole of 2020, according to domestic data.

Methanol shipments this year ranged between 20,000 and 60,000 tonnes per month, mainly to the Netherlands, Spain, Japan and China.

Prices for Venezuelan methanol vary by destination. They caught $ 130 to $ 140 per tonne for November-December delivery. A price well below US, which ranges from $ 450 to $ 690 per tonne. Experts say prices vary widely depending on quality and delivery terms, such as fares.