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CONDENSATE EAST OF SUEZ: NGL
and its Naphtha Impacts in Asia Pacific & Mideast

Condensate and the Light-End Products Squeeze

By Asia Pacific Energy Consulting
Al Troner, President

—This is the “definitive” report on condensate in the fastest growing, critical regions of the world, Asia Pacific and the Mideast Gulf.

—The study provides a complete guide to optimizing value in future condensate production, utilization, and trade.

—A comprehensive study detailing the fundamentals and drivers in the Middle East Gulf and Asia-Pacific regions.

Some key issues in considering Condensate:

Condensate, one of the two groups defined as Natural Gas Liquids (NGLs), is finally coming of age in world trade, marketing, refining and petrochemicals. Condensate sales are moving from a niche marketing specialty to a mainstream segment of crude and products trade, and nowhere is this more evident than in the Mideast Gulf and Asia Pacific.

The protean nature of condensate allows it to be used in a wide range of sectors: as a refinery slate component; in specialized distillation towers called condensate splitters; in direct feed to ethylene crackers; in gasoline blending and as a substitute for gas in turbine power generation. It can be defined as a base material, a blending component, a feedstock or a boiler feed. Its very flexibility – and the many names and definitions that are common for condensate in the oil industry – have led to some confusion among potential buyers and in a sense that has undervalued this equivalent of light, sweet crude. We believe that condensate will come into its own as a valuable refining and petrochemical feedstock in coming years.

Asia Pacific will be the epicenter for world petrochemical demand growth over the next decade; expanded gas and NGL output in the Mideast Gulf will underpin a ballooning of condensate and condensate-derived naphtha production in that subregion. Asian olefins manufacturers depend on paraffinic naphtha for the vast majority of their feedstock supply. Rising condensate output will have a direct impact on feedstock avails. This will also increase the use of segregated condensate in direct petrochemical feed and expand condensate splitting in both in Asia Pacific and the Mideast Gulf

OTHER KEY DEVELOPMENTS

PRODUCTION

The structural shift to accelerated development of gas reserves has become ever more apparent in recent years, as East of Suez countries seek to transform gas reserves into new base energy supply. New projects mean a sharp and sustained increase in total gas production and in particular marketed gas output, yet increased gas volumes will underpin a continued rise in Natural Gas Liquids (NGL) output. This impacts condensate in particular, which, unlike its Liquefied Petroleum Gas (LPG) counterparts propane and butane, does not require specialized storage and transportation infrastructure for commercial sales.

MARKETING AND TRADE

Condensate trade and marketing was given a substantial boost by the overall strength of base petrochemicals since mid-2006. As naphtha always makes up a majority of the yield derived from condensate, this sector’s strength underpinned a substantial rise in condensate interest – and prices. Refiners too have begun to review condensate purchases as a means to balancing the higher volume of heavy, sour grades that have been available on crude markets.

PETROCHEMICALS

This study details all base petrochemical capacity, olefins and aromatics capacity in the Mideast Gulf and Asia Pacific, current and forecast. The substantial that petrochemicals have on condensate is underlined by the parallel full listing of condensate splitters and petrochemical pre-treatment units for the region.

PRICING

A proliferation of traded grades has helped to broaden the number and range of pricing systems used to market condensate. Traditionally refiners, as buyers, preferred crude linkage, in order to determine condensate price, while petrochemical buyers, above all interested in feedstock values, preferred naphtha-linked pricing. Yet both condensate sellers and buyers have broadened their options and crude-linked and product-linked sales formulas have multiplied.

Flexibility in pricing systems has become a trend among many condensate exporters, with sales adjusted according to sector and geographic region.

There are many who believe that a global condensate market is emerging, which, though small in volume compared to world crude or products trade, should expand rapidly through end-decade.

Biography
Al Troner is President of Asia Pacific Energy Consulting (APEC), a small consulting firm established in 1995 and now based in Houston, with associates in the U.K. and Australia. Since 1984, he has worked in Asia''s energy sector, establishing Dow Jones/Telerate's regional energy services that year and returning to Singapore in 1989 to found and direct Petroleum Intelligence Weekly''s Asia-Pacific bureau. He won the International Association of Energy Economics award for Energy Journalism in 1994, retiring from journalism the following year. From 1987-1989, he was as a research assistant for the energy group of the East West Center. Recent work includes studies on Global Acidic Crude, Asia-Pacific Product Quality, Asia-Pacific and Global LNG, Gasoline Balances in Asia Pacific and East of Suez Condensate. Mr. Troner has worked in the energy industry in the U.S., Europe and the Middle East, as well as in Asia Pacific. Mr. Troner received a BA from the State University of New York at Stony Brook and an MA from the University of Hawaii.

APEC specializes in 'tactical' consulting, focusing on research and analysis that help oil and gas companies identify, analyze and profit from emerging commercial situations. APEC projects center on problem-solving for companies targeting short- and medium-term business concerns, in a timeframe generally of one to five years. As a small independent shop, the company aims to provide tailored, company-specific services, either for regular core clients or on limited projects, targeting emerging business opportunities.

PRODUCT NO: CNDENSATE

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Following is the table of contents for this comprehensive report on Condensates in the Middle East and Asia-Pacific.

CONDENSATE EAST OF SUEZ:
NGL and its Naphtha Impacts in Asia Pacific & Mideast

Table of Contents

I. Introduction

Condensate … as a Paradox
1. Production
2. Demand
3. Balances
4. Markets
Condensate & Its Potential
Condensate & Its Profitability

II. Parameters of Condensate

Basic Definitions
Condensate Characteristics
Nature of Utilization
1. Utilization by Sector: Splitting
2. Utilization by Sector: Gasoline and Blending
3. Utilization by Sector: Petrochemicals Ethylene
4. Utilization by Sector: Petrochemicals Aromatics
5. Utilization in Power Generation
6. Utilization as Field Fuel
Moving into Mainstream: Developments since the 1990s

III. Overview of Key Developments

Production
Demand
Marketing and Trade
Pricing

IV. Major Producing Countries

All country markets covered include a supply, utilization and export outlook. Markets detailed include:

Mideast Gulf
1. Saudi Arabia
2. Iran
3. UAE
4. Qatar
5. Iraq
6. Oman
7. Yemen
South Asia
1. India
2. Pakistan
3. Bangladesh
Southeast Asia
1. Indonesia
2. Malaysia
3. Thailand
4. Brunei
5. Vietnam
6. Myanmar
7. Philippines
Northeast Asia
1. China
2. Russian Far East
Australasia
1. Australia
2. Papua New Guinea
3. New Zealand