Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.

  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list

Analysis: South Korea may seek prompt naphtha after condensate cargo collision

Natural Gas | Oil | Crude Oil

So what happened at MPGC 2019?

Natural Gas | Oil

Platts Scenario Planning Service

Oil | Crude Oil | Oil Risk | Petrochemicals | Aromatics | Olefins | Petrochemicals Risk | Polymers | Solvents & Intermediates

S&P Global Platts University London

Electricity | Electric Power | Emissions

PJM endorses plan to evaluate pricing carbon emissions into its wholesale power markets

Analysis: South Korea may seek prompt naphtha after condensate cargo collision


Jan 8 delivery of Iran condensate to Daesan fails after cargo collision

Hanwha Total holds condensate in storage, seeks prompt naphtha

Search and rescue still ongoing, Hanwha Total fully insured

London — Ultra-light crude and naphtha sellers in Asia may focus on South Korea for potential sale of prompt oil supplies after a crude tanker carrying close to a million barrels of Iranian condensate caught fire over the weekend, failing to reach the country's petrochemical complex in Daesan as planned, market sources said Monday.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

An Iranian tanker, carrying around 960,000 barrels of South Pars condensate, caught fire late Saturday after a collision with another vessel off in the East China Sea.

The cargo was purchased by South Korea's Hanwha Total Petrochemical and it was scheduled for delivery to Daesan on January 8-10.

Hanwha Total said the company will implement its own contingency plan as it has sufficient ultra-light crude in storage units, but may need to look for some alternate feedstocks in the regional spot market for prompt delivery.

"We have our contingency plan for backup. We have an alternative fleet and backup storage to replace it," a spokesperson at Hanwha Total told S&P Global Platts.

"Still, we might need to look around [in the regional spot] markets to see if any prompt [condensate or naphtha] is available ... it's probably best to buy straight-run naphtha because regional condensate supply is very tight," a company trade source said.

Industry sources said Hanwha Total may scramble to find naphtha for the typically busy winter season as plants typically run close to their maximum capacities during early first quarter.

"Northeast Asian, especially South Korean, splitters run close to maximum capacity in winter so they will be extremely short condensate and naphtha now," said a Singapore-based sweet crude trader.

Hanwha Total has been consistently receiving 100,000-120,000 b/d of South Pars condensate for its 180,000 b/d condensate splitter at Daesan since Iran's return to the international market after the lifting of economic sanctions in early 2016.


Some Asian oil product traders said Hanwha Total could seek some naphtha or condensate for prompt month delivery in an effort to cover its unexpected short position.

The company has already emerged Monday seeking an unspecified volume of open spec naphtha for second-half February delivery, with an option to delivery in H1 February into Daesan. The tender closes January 8.

Hanwha Total typically buys around two to three cargoes of heavy full range naphtha in every half-month trading cycle, or around 100,000-150,000 mt in a single month.

Heavy full range naphtha is sought by Asian petrochemical producers to split into heavy naphtha and light naphtha, in which the latter could then be further processed into petrochemicals.

Condensate splitters in South Korea often shift to using naphtha as feedstock when condensate becomes scarce or relatively expensive.

Meanwhile, regional condensate traders noted that it may be difficult to find large volumes of ultra-light crude ready for delivery into South Korea within next five to 10 days.

"You're looking for something that can arrive within H1 January, which is difficult. For them, the only way is to buy naphtha," said a Singapore-based condensate trader.

In addition, traders said Australian North West Shelf condensate may not be a suitable option for Hanwha Total to replace its lost South Pars barrels due to the difference in crude quality and a relatively lengthy voyage.

"South Pars is a real sour oil with hefty mercaptan content ... NWS is the total opposite with almost zero sulfur content ... besides it will still take around 10 days [or more] for a NWS cargo to travel to Daesan from Dampier," said a condensate trader at a South Korean refining company.

Traders also pointed out that prompt NWS condensate may not be available as most of the January cargoes have been secured by Indonesia.

Late last year, Indonesia's state-run Pertamina purchased three 650,000-barrel cargoes of NWS condensate for loading in January 3-4, 15-16 and 23-24 for delivery to its Trans Pacific Petrochemical Indotama petrochemical complex in Tuban.


Iranian oil ministry news agency Shana reported that the ship, the Sanchi, collided with Hong Kong-registered cargo vessel CF Crystal approximately 97 km off the South Korean coast.

Sirous Kianersi, managing director of National Iranian Tanker Company, was quoted as saying by the oil ministry news service that 32 crew members of the oil tanker have gone missing and rescue operations are going on.

"The cause of the collision and the damage is being examined," Kianersi said.

The South Korean navy and naval police have also sent two helicopters and a patrol rescue vessel to help coordinate with Chinese and Iranian maritime authorities, industry sources based in Seoul said.

The Panamax vessel CF Crystal was carrying soybeans loaded from the US West Coast and was heading to South Korea.

The vessel was chartered by a South Korean ship operator. According to shipping sources, the vessel's bow has been damaged and the entire crew has been rescued.

Meanwhile, Hanwha Total confirmed that any financial losses incurred by the undelivered oil would be fully covered by its own insurance package deals, while the company bears no legal responsibilities over the vessel collision and environmental damages caused by the recent accident.

"Unlike what some South Korean, Chinese and Iranian media reported, Hanwha Total did not lease the vessel," the company source said.

Trading managers at South Korean refiners and petrochemical companies previously said majority of South Pars condensate they buy are delivered in Iranian-owned tankers and the seller typically handles all insurance and vessel chartering documents for the buyers.

The 164,154-dwt Sanchi was a 2008-built, Panama-flagged vessel owned and operated by NITC.

A NITC source confirmed that the vessel had the protection and indemnity cover from the International Group of P&I clubs (IG P&I).

The IG P&I cover will, to a large extent, take care of the pollution clean-up cost. NITC is expected to issue a detailed statement either Monday evening or Tuesday morning.

-- Sue Koh, Andrew Toh, Pradeep Rajan and Gawoon Philip Vahn,
-- Edited by Irene Tang,