Page 5 - MEOG Week 19 2021

MEOG COMMENTARY MEOG

required pipes. PEDEC was contracted to deliver an eye on this, as Iranian crudes-rich naphthene
the project on an 18-year build-operate-transfer and aromatic content is good for boosting refin-
(BOT) basis alongside fellow domestic firms ing margins in integrated complexes.”
Petro Omid Asia and Omid Investment Man- Meanwhile, a South Korean source said: “It’s
agement Group. still a big ‘if’ at this stage ... but we are actively
reviewing the recent past Platts assessments to
Export expansion stand ready to submit term and spot cargo bids
Despite the sanctions, Iran shipped 2.43mn to the NIOC in the ‘big if’ event the international
bpd of crude during April, up 130,000 bpd from sanctions on Tehran are called off and Iranian oil
March, according to a survey by S&P Global exports resume.”
Platts this week. Until US sanctions were extended to cover
The figure is the highest since May 2019 and condensate in 2018, the majority of Iran’s pro-
illustrates Tehran’s increasing confidence in the duction was exported to Asia, with Japan and
progress of talks to return to the 2015 Joint Com- South Korea the key buyers. 2016 and 2017 vol-
prehensive Plan of Action (JCPOA) agreement. umes dropped by around 40% in 2018, falling to
Platts quoted market sources as saying that zero in 2020.
Iran has been steadily exporting crude volumes In May last year, as part of Iran’s ‘resistance’
to China. economic model, Oil Minister Bijan Zanganeh
Asian refiners will also be cheered by the announced that direct condensate exports
announcement this week by Iran’s Ministry of would be curbed in order to improve the avail-
Petroleum (MoP) that it will more than double ability of feedstock for refineries and petchem
the country’s condensate production during the facilities, thereby increasing the output of added
current Iranian calendar year, which ends in value petroleum products including naphtha
March. and gasoline.
As the Islamic Republic closes in on the com- Zanganeh said at the time: “All the gas con-
pletion of the final offshore phase of the super- densate will be refined in the Persian Gulf Star
giant South Pars gas field development, Tehran is and Siraf refineries … to gasoline and feedstock
aiming to increase ultra-light condensate output for petrochemical units.” PGSR receives around
from 550,000 bpd at present to 1.3mn bpd. 420,000 bpd of condensate, while in early 2020
South Pars and other nearby fields are respon- around 130,000 bpd was directed to petchem
sible for the bulk of Iran’s condensate output and units, with another 80,000 bpd going to other
are believed to be capable of producing 1mn bpd. refineries.
With domestic demand for condensate esti- Iran became self-reliant in terms of fuel when
mated at around 630,000 bpd – more than 75% the third phase of the PGSR came on stream in
of which is directed to the Persian Gulf Star 2019. The country now has surplus fuel pro-
Refinery (PGSR) – the move will provide large duction capacity at 110mn litres per day, with
volumes for export. South Pars condensate is demand estimated by the National Iranian Oil
highly prized as an economical refining and pet- Refining & Distribution Co. (NIORDC) at less
rochemical feedstock. than 90mn lpd.
S&P Global Platts quoted Asian trading and With that in mind, the majority of the
feedstock procurement sources as saying that much-anticipated oil and condensate produc-
they are gearing up to resume importing Iranian tion increase will be available for export, provid-
cargoes. ing a boon for refiners, but a potential headache
A trader at one of China’s state-owned oil for other producers given qualities and quanti-
companies told Platts: “We have been keeping ties on offer.™

Week 19 12•May•2021 www. NEWSBASE .com P5