US naphtha exports are expected to increase in 2015 for all grades, as refiners continue to seek new outlets for increased production, as per Argus Media. However, growing condensate exports could impact naphtha output.
Refiners have already taken the first step to shaping an export market, with several trading heavy N+A naphtha at differentials to the Nymex RBOB rather than using an assessed Gulf coast conventional gasoline pricing basis. The US Atlantic coast already prices against Nymex RBOB, being more of a cargo market, while the Gulf coast has typically been more of a domestic barge market. This should change in 2015 with more exports anticipated. Heading into the new year, major Gulf coast refiner sellers have already moved to using the Nymex RBOB basis while traders remained resistant.
Oversupply and a volatile pricing basis drove naphtha prices to historical lows in 2014. The oversupplied Gulf coast market carved fresh opportunities for heavy N+A naphtha exports from the US to the Asia Pacific this year as well. At least two to three cargoes of heavy N+A naphtha have been exported to Asia Pacific each month. The number of export cargoes can rise to 5-6 cargoes per month if arbitrage is open.
Light paraffinic naphtha prices saw greater losses over the year. Increased production of light naphtha arising from shale crude processing added to the fray, driving supply up and prices down. This additional production had been anticipated with roughly 400,000 bl of condensate splitter capacity planned for the Gulf coast to utilize the condensate supply from shale processing. About 100,000 bl of new splitter capacity is already in place, with an additional 50,000-100,000 bl expected to come online by the end of 2014. Some refineries on the Gulf coast and midcontinent have also been configured with topping units to process more condensates by 2015, again contributing to elevated naphtha yield.
29-Dec-14 
