- Condensate to load in April for South Korea petrochemical firm
- Cargo is Hanwha's 1st purchase from Iran after sanctions ease
Iran sold a light hydrocarbon liquid pumped from its South Pars fields to South Korea’s Hanwha Total Petrochemicals Ltd., as the removal of sanctions help it challenge producers of similar supplies such as Qatar.
The National Iranian Oil Co. will load in April a cargo of condensate to be shipped to the South Korean petrochemical maker, according to an official from the state-run producer in the Middle East nation. That’s the first shipment of supply from the offshore South Pars natural gas fields to the Asian company, which had been purchasing Qatar’s competing Deodorized Field Condensate while sanctions were in place on the Persian Gulf state.
The premium traders pay over benchmark Dubai crude prices for the Qatari supply is predicted to shrink amid expectations that cargoes of similar-quality South Pars condensate, a raw material for chemical factories, will become available to buyers. Iran has vowed to regain the market share it lost in Asia, the world’s biggest oil market, after the sanctions that curbed its exports were removed as part of a deal over its nuclear program with world powers.
“This changes the dynamics in the DFC market significantly,” Tushar Tarun Bansal, a Singapore-based analyst at industry consultant FGE, said by phone on Monday. “Essentially the Qataris now have more competition, as those who buy DFC can also refine South Pars without much issue. There will be some head-on competition.”
Qatar International Petroleum Marketing Co., known as Tasweeq, may sell term supplies of the nation’s Deodorized Field Condensate for loading from April to June at $3.50 to $3.80 a barrel more than the benchmark Dubai price, according to a Bloomberg survey of 5 traders earlier this month. That would be lower than the $3.90 to $4-a-barrel premium the Middle East nation received for shipments in January to March.
As Iran seeks to regain lost market share in Asia, it’s planning to increase exports by 1 million barrels a day this year, dismissing the possibility of joining an output freeze agreed by major producers including Saudi Arabia.