Venezuelan petrochemicals arrive in U.S. despite Washington trade curbs
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[November 19, 2021] By
Marianna Parraga and Deisy Buitrago
HOUSTON/CARACAS (Reuters) -Venezuelan
petrochemicals produced by joint ventures between state-run chemical
firm Pequiven and foreign partners have arrived in the United States,
despite Washington's efforts to limit trade with the OPEC oil and gas
producer.
At least two cargoes of methanol, a widely used industrial product whose
prices have soared this year, have discharged at Houston area ports
since October amid a rapid expansion of the South American country's
global sales of petrochemicals and oil byproducts, according to tanker
tracking and U.S. customs data.
The shipments represent a new and unreported effort by Venezuela to
boost revenues despite U.S. sanctions on its oil industry that cut vital
crude exports to the lowest in 77 years.
U.S. sanctions were designed to oust President Nicolas Maduro, whose
last election Washington views as a sham. Maduro insists the 2018 vote
was free and fair.
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Mitsubishi Corp resumed exports of methanol to the United States in 2021
from its Venezuelan joint venture Metor after a suspension of a couple
years, a Mitsubishi spokesperson told Reuters. Metor's shareholders
include Petroquimica de Venezuela, or Pequiven.
Venezuela's main oil port of Jose was listed as the point of origin on
U.S. customs records of one of the two methanol shipments, but both
sailed directly from Venezuela, Refinitiv Eikon tracking data showed.
Names of the buyers and sellers for the two methanol cargoes that
arrived in Houston were redacted on the U.S. customs data, which were
provided to Reuters by consultancy IHSMarkit.
The U.S. Treasury Department and the U.S. Customs and Border Protection
agency declined to comment on the shipments.
Pequiven, which did not reply to Reuters requests for comment, said on
Twitter in July that Metor was exporting methanol to Europe, South
America and Asia.
WIDENING SANCTIONS
A U.S. executive order in 2019 subjected the Venezuelan oil industry to
sanctions and this was used to blacklist state oil company PDVSA and its
subsidiaries. A subsequent order broadened sanctions to cover companies
owned or controlled by the government. State-run Pequiven and
Venezuela's petrochemical operations were not specifically named.
"Metor itself should not be subject to sanctions," said Daniel Pilarski,
a partner at New York-based law firm Watson Farley & Williams LLP who
specializes in cross-border transactions and U.S. trade sanctions.
"However, if Pequiven were the ultimate originator of the methanol, then
there could be a risk that any shipment to the United States would be
treated as the indirect receipt of goods from Pequiven, which would be a
violation, even if Pequiven never received payment," Pilarski said.
Companies exporting Venezuelan methanol to the United States could
obtain a license from the U.S. Treasury to permit the trade or take
other steps to ensure Pequiven was not treated as the indirect seller,
he said.
![](http://archives.lincolndailynews.com/2021/Nov/19/images/ads/current/remington_sda_100120.png)
Methanol, produced in Venezuela from natural gas, can be found in
everyday products including gasoline, paints, carpeting and plastics.
U.S. imports have outweighed exports in recent years, according to
IHSMarkit.
On Oct. 7-11, tanker PVT Aurora discharged about 16,900 metric tonnes of
Venezuelan methanol in Texas. A portion of the cargo was handled by
Intercontinental Terminals Company's (ITC) Deer Park chemicals terminal,
according to Refinitiv Eikon data.
An ITC spokeswoman did not reply to requests for comment.
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![](../images/111921pics/busine23.jpg)
Venezuela's President Nicolas Maduro addresses the media at the
Miraflores Palace, in Caracas, Venezuela October 15, 2021.
REUTERS/Leonardo Fernandez Viloria
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The Vietnam-flagged vessel traveled from the Jose port, which serves PDVSA and
Pequiven.
RAMPING UP EXPORTS
A second 20,000-tonne cargo of Venezuelan methanol followed a similar route in
November on tanker Sakura Advance, which discharged some of its cargo in Houston
on Nov. 11-13 and another parcel at South Louisiana Port days later, according
to the Eikon data.
Italy's Eni also produces methanol in Venezuela via Supermetanol, its 50:50
venture with Pequiven.
"Eni's affiliate holds a stake in a methanol plant located in Venezuela and
deals with the marketing of its equity production in respect of all applicable
laws and regulations related to economic and financial sanctions, trade
embargoes and similar laws," an Eni spokesperson said.
Pequiven and PDVSA have ramped up exports of petrochemicals and oil byproducts
that are not as valuable as crude and until recently had not been a priority, an
analysis of internal data from the two companies showed.
U.S. sanctions and warnings to traditional buyers of Venezuelan crudes sharply
cut PDVSA's exports in recent years.
But shipments of petrochemicals and oil byproducts have climbed, including
exports of methanol, sulfur pastilles, urea, natural gasoline, light virgin
naphtha and petroleum coke, according to the data. This was confirmed by three
people familiar with the matter, who declined to be identified as they were not
authorized to speak publicly.
Low prices offered to buyers for the petrochemicals from Venezuela have boosted
exports, generating income that has partially been used by some of Pequiven's
joint ventures to reopen and revamp production units, the people said.
A more reliable supply of natural gas by PDVSA to Pequiven's complexes also
helped boost petrochemical output.
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"The plants are in recovery process as proceeds from sales have allowed," one of
the people said. "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 byproducts, putting the trade on track this year to double
the 1.03 million tonnes exported for the whole of 2020, according to the
internal data.
Shipments of methanol this year ranged between 20,000 and 60,000 metric tonnes
per month, mostly bound for the Netherlands, Spain, Japan and China, according
to the data and the three people.
Prices for Venezuelan methanol differ based on destination. They fetched $130 to
$140 per tonne for November-December delivery, one of the people said. That is
below U.S. spot prices, which range from $450 to $690 per tonne. Experts say
prices vary widely depending on quality and delivery terms, such as freight
rates.
By comparison, a tonne of benchmark Venezuelan Merey crude for November delivery
had a market price of about $395.
(Reporting by Marianna Parraga and Gary McWilliams in Houston and Deisy Buitrago
in Caracas; additional reporting by Yuka Obayashi in Tokyo, Matt Spetalnick in
Washington, and Stephen Jewkes in Milan; Editing by Edmund Blair)
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