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Demand
Condensate in Asia, like crude, said the study, will end up in a refinery. (There is no stream like Algerian, it said, which can be fed directly into the furnace of an ethylene steam cracker.) That refinery could be a conventional crude refinery, simple or complex; or a purpose-built condensate refinery or splitter.
These splitters are the coming thing, said FGE, accounting for 30% of the traded condensate in Asia in 2000, 50% in 2010, and will probably account for 70% or more by 2020.
Korea and China look to be the future condensate drivers in the region.
The main interest in splitters has been to make and guarantee a supply of naphtha for a new petrochemical project, whether it be paraffinic naphtha for an ethylene steam cracker or, more commonly, naphthenic naphtha as feed to BTX (benzene, toluene, and xylene) reformers for aromatics production. Interest here comes and goes, said the study, generally following the swings of the petrochemical cycle.
The last surge in splitter building came in 2006. Then, new splitters were completed in China, Korea, Indonesia, and Thailand. Two smaller splitters started up in Japan in 2008. But interest elsewhere had subsided by that time. One splitter project in Singapore (Concord Energy) failed, as did another in Australia (Darwin Clean Fuels). Then the financial crash of 2008 stopped other splitter projects from moving ahead.
The FGE study noted it took until 2011 for splitter interest to reemerge, on the back of robust petrochemical demand in the region. 2011 saw:
• China Petroleum & Chemicals Corp. (Sinopec) converted a distillation towers at its Tianjin refinery to run on Iranian condensate. The company contracted for 50,000 b/d of South Pars condensate in 2011. Produced naphtha is fed to the Sinopec ethylene cracker in Tianjin.
• S-Oil started a new 80,000-b/d condensate splitter in Korea at its Onsan refinery in April. Produced naphtha feeds the company’s expanding aromatics production at the site.
The Jurong aromatics project in Singapore, shelved during the recession, is now scheduled for late 2014 completion, said the study. Jurong Aromatics Corp. will include a 100,000 b/d splitter. Term commitments for the feed condensate had already been made before yearend 2011.
Further out, said FGE, is a larger 400,000 b/d splitter that PetroChina is planning to build as a source of feed for a new petrochemical complex at Taizhou in Zhejiang Province. Joint-venture partners are likely to be QPI (Qatar) and possibly Shell.
Korea and China look to be the condensate drivers in the region. Korea is already the top naphtha and condensate importer, with China a major outlet for its produced petrochemicals. China, unlike Korea, prefers to make naphtha rather than to import too much (some imports being avoidable) as feed for its own growing petrochemicals production. Buying condensate to make naphtha in a splitter—as Sinopec has done at Tianjin—may be preferred.
Changes coming?
The study said producers often worry that their condensate, a byproduct of natural gas, will be hard to sell. The pool of customers can be small. Conventional refineries often have little interest in buying it, particularly if they operate expensive upgrading equipment that goes to waste when condensate is the feed.
For this reason producers may build splitters as a defensive measure to take condensate off the market, and substitute condensate with more acceptable naphtha and gas oil export sales instead.
But as new condensate splitters are built at the consuming end, said FGE, this will tend to lock in more of their condensate export sales. Not all condensate splitters are guaranteed to run, however. The Tuban Petro plant in Indonesia, the study cited as an example, has had a sporadic history of operation because of ongoing payments problems. Still, those that do run will generally need condensate regularly.
Based on present projections, the amount of traded condensate in Asia-Pacific will rise to about 1.3 million b/d by 2015, but then possibly drop off. Splitters will take more of the available condensate, refiners will take less. And there may not be much condensate out there for any new condensate splitter project.
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