Tasweeq renews quarterly naphtha contracts with Asian buyers at 40% lower premiums

16-Sep-14

Qatar's Tasweeq has renewed its quarterly naphtha contracts with Asian buyers, including India's Reliance Industries, but at premiums that were at least 40% lower versus its third quarter contracts premiums, as per traders in Reuters. Repeatedly high volumes of cargoes coming into Asia from Europe, the Mediterranean and USA have brought prices down while demand for Tasweeq's naphtha from South Korea's Samsung Total Petrochemicals has been choked off since Q3. Samsung Total dropped the quarterly contract as it has started up its own 150,000 bpd condensate splitter, which produces naphtha, in July. The premiums for naphtha grades including full-range, plant condensate and gas-to-liquid (GTL) lifting in fourth quarter, were sealed at levels ranging from mid-to-high teens a tonne to Middle East quotes on a free-on-board (FOB) basis. These were sharply lower compared to the low US$30s/ton premium for Q3. While Reliance Industries also produces and sells naphtha, it imports Qatar's GTL grade from the Oryx plant, which traders said is used for making ethylene, a building block for plastics.