Condensate exports out of Qatar and Iran have started to reach their 2015 projected peaks, said Colin Shelley, a senior consultant with FACTS Global Energy.
In 2010, trade and supply figures for condensate out of Qatar averaged over 300,000 b/d, while Iranian exports stood at just over 200,000 b/. And by 2015, projections were for Qatari exports to hit around 550,000 b/d, while Iranian exports were to be 400,000-500,000 b/d.
Shelley, who was speaking at an oil conference on Langkawi Island, Malaysia, Thursday said that the export peak had already been reached for Qatar because new projects, which started in 2010 and 2011, were channelling more condensates for domestic use. But, condensate exports are expected to dip as new splitter capacity comes on stream.
Condensates are either fed into a conventional crude oil refinery or into a condensate splitter to produce naphtha and middle distillates.
And splitters are a demand driver for condensates rather than a conventional refinery because conventional refineries often have little interest in buying condensates, a light oil, when they have expensive upgrading equipment that goes to waste when condensate is the feedstock.
Demand from splitters accounted for 30% of the condensates traded in Asia in 2000, rising to 50% in 2010 and will likely increase to 70% or more by 2020.
The last surge in splitter building was in 2006 when new splitters were completed in China, South Korea, Indonesia and Thailand, to meet the petrochemical industry's demand for naphtha.
Separately, two smaller splitters came on stream in 2008 in Japan; while one splitter project in Singapore (Concord Energy) failed as did another in Australia (Darwin Clean Fuels).
The financial meltdown in 2008 stalled other splitter projects; and it was not until this year that interest in splitters re-emerged, underpinned by robust petrochemical demand.
This year, Sinopec converted a distillation tower at its Tianjin refinery to run Iranian condensate. The company signed a term contract to buy 24 million barrels of South Pars condensate over January-December 2011. The naphtha produced is fed into Sinopec's steam cracker at Tianjin.
South Korea's S-Oil also started up a new 89,000 b/d condensate fractionation unit at its Onsan refinery in April. The naphtha produced feeds into the company's expanding aromatics production at the site.
In addition, the Jurong aromatics project in Singapore, shelved during the recession, is now scheduled for completion in late 2014. JAC will have a 100,000 b/d splitter and has already made term deals for the condensate feedstock.
Meanwhile, an expected upcoming dip in Qatar's export figures has been raised by senior Qatari officials previously.
In 2010, Qatar exported around 125 million barrels of condensate comprising Qatar low sulfur condensate and deodorized field condensate, and volumes are expected to increase to 200 million barrels by 2014.
But the anticipated startup of the new second Ras Laffan 146,000 b/d condensate splitter may then see a drop of 25%, or some 50 million barrels, sending condensate export volumes back down to 150 million barrels in 2015.
The first Ras Laffan condensate splitter, which also has a capacity of 146,000 b/d, is fed with feedstock from Qatargas, RasGas and Al-Khaleej Gas and can produce 63,000 b/d of naphtha, 52,000 b/d of kerosene/jet, 24,000 b/d gasoil, and 8,000 b/d of LPG.
While condensates to Asia have traditionally flowed from the Middle East, Shelley noted that new shipping routes opening up have already made it possible for Russian condensate to flow via the Northern Sea shipping route.
Russia's largest independent gas producer Novatek has already sent nine tankers over 2011 through the Northern Sea Route across the Arctic from the Russian port of Murmansk to the Asia Pacific, which included destinations such as Thailand.
During the 2011 navigation period for high-tonnage tankers, which lasted a record five months, Novatek transported approximately 600,000 mt of stable gas condensate to consumers in South Korea, China and Thailand via the route.
In 2011, a new route, north of the New Siberian Islands, was established, where the water is deep enough to accommodate tankers with draughts of over 12 meters, and for the first time in history, the route was navigated by the tanker Vladimir Tikhonov, a Suezmax class vessel.
