Qatar to cut condensate exports January, expects lower naphtha price
Qatar will reduce its condensate exports by a third in January 2017 when a new splitter at its Ras Laffan refinery starts operating, a Qatar Gas official told Reuters on Monday.
“Qatar is exporting around 30 cargoes (of condensate) a month. This will be reduced by 10 cargoes a month starting January,” said the official, who declined to be named saying he was not authorised to speak publicly.
Condensate is a type of light crude oil produced in association with natural gas and can be split into various fuel products including naphtha, which is used to make gasoline or dilute heavy crude, for export or to sell domestically.
Qatari condensate exports have faced competition from US and Iranian light oil shipments but the new splitter should help the Gulf state soak up some of its condensate at home.
The Qatar Gas official said the completion date of the splitter would depend on the progress of tests now being run on new equipment and that some “technical difficulties” had been faced at Qatar’s first condensate refinery, Laffan 1, which started production in September 2009.
Last week a Qatar Petroleum official told Reuters that trials on the new splitter would begin in August.
Output of full-range naphtha will double with the start of the splitter, Ibrahim Al Sulaiti, marketing director of condensate at Qatar International Petroleum Marketing Co, or Tasweeq, said in 2014. Part of this would then be used as feedstock for new gasoline and aromatics units that are set to come online in late 2017.
The Qatari unit’s start-up will increase Middle East naphtha exports to Asia, which is already struggling with a stubborn supply glut and tepid demand from gasoline producers.
But the Qatar Gas official said that Qatar would have no difficulty selling the product.
“There is no issue about exporting or marketing the project, it’s about the premium applicable. We expect during the first phase for there to be a reduction in value (of naphtha) but when the facility comes on stream with a steady flow we should get the right premium. We know the market, we know there is plenty of demand for it”.