Qatar’s new oil refinery Ras Laffan has come onstream. It is pumping almost 80,000 bpd of middle distillates, 24,000 bpd of gas oil and 52,000 bpd of kerosene and jet fuel. These markets are deeply impacted by the global recession, adding to pressures in an already oversupplied market.
The biggest product stream at the plant will be 61,000 bpd of naphtha- sufficient to fuel two 1 mln tpa petrochemical crackers. Majority of this will serve as petrochemical feedstock in Asia, long-term supply deals for which were done in August. Also, in anticipation of some start up problems, the refinery has been conservative in selling its naphtha, and in fact, is expected to have surplus quantities. Hence markets will get pressured as supply actually comes on line. Most of the naphtha is expected to feed new crackers in China, affecting sales from Japan, South Korea and Taiwan.
In the past few weeks, supplies from Qatar along with rising exports from India have been exerting pressure on Asian naphtha markets, at a time when naphtha refining margins have dipped below US$75/tom from levels of US$125 in early September.
Until now, Qatar had been a net importer of gas oil. Ras Laffan will help fill the void and reverse the export-import trend.