Dow Jones: Extra Supply, Weak Naphtha Dampen Condensate Outlook

“A surge in condensate supply combined with an expected long market for its main derivative naphtha are likely to weaken the liquid hydrocarbon’s outlook in Asia in the longer term.  Numerous liquefied natural gas projects in the Middle East and Australia will churn out heavy volumes of by-product condensate, forcing suppliers to find outlets for the super light oil. Some are already building condensate splitters, but the initial impact will be an increase in exports….Up to 8.5 million metric tons a year of naphtha production will be added in the Middle East this year, while refineries are expected to produce more naphtha if refining margins are distillate-driven as predicted by the International Energy Agency, said John Aspden, consultant at Poten & Partners. ‘Anyway you look at it, there’s going to be much more naphtha than ever before,’ he said.”