May 28
(Last Trade / Eastern Time)

Crude intentions and potential customers: Pennine sources light oil appetite across Albania


Now that a production sharing agreement has been signed for Albania’s Velca Block, Pennine Petroleum Corporation has hit the ground running in the Balkan republic.

We’re working with Albpetrol, the country’s state-owned energy firm, to examine existing geological information to identify potential drilling targets.

At the same time, we’re also sourcing potential customers for future Pennine oil production.

With drilling depth expected to produce lighter crude oil in the Velca Block, Pennine Director Jeff Saxinger, P.Eng., and CEO Desmond Smith recently conducted a reconnaissance mission in Albania to identify potential customers, once the drill bit finds purchase in Velca carbonates.

Mr. Saxinger and Mr. Smith paid four site visits across Albania. For your interest, we’ve summarized those visits—and potential appetite for future Pennine crude—in this latest edition of Paydirt.


1) New refinery, Elbasan

A small new refinery began operations in December 2016 in Elbasan, a central Albanian city.

The refinery can produce about 4,000 barrels per day, and has capacity to take Velca Block oil from Pennine.

Pennine chairman Richard Wadsworth has business ties with one of the refinery’s three partners, dating back to Mr. Wadsworth’s days at the helm of Bankers Petroleum Ltd.

The Elbasan refinery has two 12,500-barrel crude oil tanks, three 2,500-barrel bitumen tanks, and three tanks of similar size for refined products, such as gasoline, kerosene and jet fuel.

The Elbasan facility is currently looking for processing contracts.


2) Petrolifera ship loading terminal, Vlore

This tank farm and shipping terminal is based in Vlore, southern Albania’s major port city, and is available to receive Pennine crude.

Bankers Petroleum trucks its oil here for shipping to refineries in Italy.

The terminal began operations in 2008. Years earlier—as president of Bankers Petroleum, which was seeking a shipping terminal to handle its crude—Mr. Wadsworth had supported Petrolifera’s planning and application efforts with Albanian government and industry.


3) Combined cycle power plant, Vlore

This power plant, with one 110-megawatt (MW) AE 64.34A power turbine, is capable of a dual-feedstock arrangement—diesel and fuel oil or natural gas, for example—with a heat-recovery steam generator unit that runs the steam turbine.

No fuel source is currently available for the power plant, which can operate with 16 million cubic feet of natural gas per day or 2,800 barrels of oil a day. The Trans Adriatic Pipeline, currently under construction, may soon be available to provide natural gas as a fuel source.


4) Patos Marinza oilfield, near Fier

Patos Marinza, near the southwestern city of Fier, is the biggest onshore oilfield in Europe, and the largest oil-producing field in Albania.

Bankers Petroleum, which began producing heavy oil in the region in 2004, needs a regular source of diluent (that is, a less viscous lightening agent) to mix with its heavy crude for transportation purposes.

Light oil produced by Pennine would be able to meet this need.