10% dip in ADNOC’s Jan-Feb naphtha supplies on reduced runs at condensate splitters

14-Jan-10

Aggravating naphtha supply problems in Asia is the abrupt decision by Abu Dhabi National Oil Co (ADNOC) to reduce splitter naphtha export volumes for January-February lifting by around 10% and also to defer few shipments to Asia to a later date in the same month; on lower condensate splitter runs. This tightening of supplies coincides with supply disruptions from other Middle Eastern producers - Saudi Aramco's Ras Tanura refinery is undergoing maintenance, while Kuwait had to delay H1-January cargoes to customers because of an outage in December that disrupted supplies. ADNOC supplies around 4 mln tpa of splitter naphtha made from condensates, and a total of about 2.6 mln tons of low-sulphur and paraffinic grade. ADNOC has the option to provide 5% more, or less, of the contracted volumes with Asian buyers, depending on market fundamentals. The reduced run rate at the condensate splitters has been caused by limited feedstock. This is contrary to market expectations that ADNOC would increase its naphtha supplies from Q1-10 when it will expand its gas fields, from where additional condensates will be fed into its existing splitters. The Company is expected to have an additional 1.2 mln tpa of splitter naphtha after it completes the expansion at its gas field.