• 4 minutes China - EU: Xi Says Cooperation Is Mainstream In Their Ties
  • 8 minutes The Mining Industry Has Had It Easy For Far Too Long
  • 11 minutes Lawsuit-Happy Councilor Wants to Take Big Oil to Court
  • 15 minutes U.S. Shale Output may Start Dropping Next Year
  • 3 hours Dutch Populists Shock the EU with Election Victory
  • 46 mins Venezuela Says Russian Troops Land to Service Military Equipment
  • 1 hour Trump to Make Allies Pay More to Host US Bases
  • 9 hours Multi-well Pad Drilling Cost Question
  • 19 hours U.S.-China Trade War Poses Biggest Risk To Global Stability
  • 2 hours Public Companies that attended OPEC "THREAT DINNER" at CERRAWEEK must disclose any risks in their SEC Financial filings.
  • 4 hours 3 Pipes: EPIC 900K, CACTUS II 670K, GREY OAKS 800K
  • 2 hours England Running Out of Water?
  • 2 hours Read: OPEC THREATENED TO KILL US SHALE
  • 2 hours Mexico Demands Spain and the Vatican Apologize to Indigenous People for the Spanish Conquest
  • 1 day One Last Warning For The U.S. Shale Patch
  • 1 day European Parliament demands Nord-Stream-ii pipeline to be Stopped
  • 2 days Modular Nuclear Reactors
Alt Text

Can Summer Save LNG Demand?

With Asian LNG spot prices…

Alt Text

Flurry Of Bearish News Sends Oil Lower

Renewed demand concerns are spooking…

Irina Slav

Irina Slav

Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.

More Info

Trending Discussions

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

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News