• 4 minutes "Natural Gas Trading Picks Up Considerably Amid High Volatility" by Charles Kennedy - ...And is U.S. NatGas Futures dramatically overbought at the $6.35 range?
  • 8 minutes How Far Have We Really Gotten With Alternative Energy
  • 12 minutes  What Russia has reached over three months diplomatic and military pressure on West ?
  • 2 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 3 days Revisiting: "The U.S. Grid Isn’t Ready For A Major Shift To Renewables" from March 2021 by Irina Slav at OILPRICE
  • 19 hours What China is Learning from Russia's War in Ukraine and its Consequences
  • 6 days How cheap Chinese tires might explain Russia's 'stalled' 40-mile-long military convoy in Ukraine
  • 2 days Failure To Implement Russian Oil Ban Could Send Oil Crashing To $65
  • 4 days Natural Gas is the Cleanest and most Likely Source of Energy to Fuel the World.
Will Crude Hit $120 Again?

Will Crude Hit $120 Again?

A number of bullish factors…

U.S. Shale Drillers Cautious Despite Record Earnings

U.S. Shale Drillers Cautious Despite Record Earnings

U.S. shale drillers are publishing…

High Gasoline And Diesel Prices Are Here To Stay

High Gasoline And Diesel Prices Are Here To Stay

As gasoline and diesel prices…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Australia Positioned For Asian Plastics Boom

Oil executives are rightly wondering whether their business faces long-term threats from alternative energy sources. But for many years to come, the world will still need large volumes of oil and gas. The same can be said for plastics, a ubiquitous material used in all facets of modern economic life. There may be alternatives that displace plastic here and there, but for the time being, plastics aren’t going anywhere, despite efforts to replace them with fully biodegradable, non-oil materials.

One crucial ingredient is used in the manufacturing of plastics: naphtha. Naphtha is a product that comes from oil condensate – a light hydrocarbon liquid that’s most commonly found alongside natural gas. Demand for this liquid – and naphtha – is rising in Asia, and the nearest producers are turning their attention to this demand.

Australia is especially well placed to supply condensate to Asian splitters – the refining facilities that turn condensate into naphtha and other oil products. The country has several huge LNG projects, such as Woodside’s Angel field, Chevron’s Gorgon field, and Inpex’s Ichtys field. Angel has a capacity of 43,500 barrels of condensate daily. Inchtys will yield around 100,000 barrels of condensate daily when full-scale production begins early next year, and Gorgon can supply some 20,000 barrels per day.

The combined condensate production from these three fields alone – assuming it will all be exported – would be enough to fully satisfy the needs of two new splitters currently under construction in South Korea and Taiwan. This puts Australia in a very comfortable position as a potential condensate exporter to Asia. Related: Get Ready For $80 Oil

But it’s not the only player in this field. Iran and Qatar are major competitors in the gas and condensate area, but they are adopting a different approach. Qatar recently said it will be reducing its condensate exports by a third starting next January, and will build its own splitter. Naphtha prices paid by Asian importers are unattractively low for Qatari producers, hence the decision to absorb a greater part of the country condensate production locally.

Iran is also betting on local refining. A tender will soon be announced for the funding and construction of the Seraf refining complex, which will process a total of 480,000 barrels of condensate daily. Companies from Japan and South Korea are the most likely investors and, in four years’ time, buyers of the refinery’s output.

Asian petrochemical producers need naphtha, and they need condensate to make it. According to Reuters, Australia is better placed than either Qatar or Iran to benefit from developments in the Asian petrochemical market.

The current naphtha deficit is being dealt with by building new splitters rather than by ramping up direct naphtha purchases. This is good news for Australian condensate exporters, and potentially bad news for those betting on naphtha exports: the commodity is in excess globally, and the new splitters in Asia will keep refining and export margins down.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News