In this list

Outlook 2019: China's Fuhaichuang set to return as major condensate buyer

Commodities | Agriculture | LNG | Natural Gas | Oil | Crude Oil | Metals | Petrochemicals | Shipping | Containers | Dry Freight | Tankers

Suez Canal


Platts Market Data – Oil

Oil | Crude Oil | Coronavirus | Energy Transition | Macroeconomics

37th Asia Pacific Petroleum (APPEC 2021)

Oil | Crude Oil | Refined Products | Fuel Oil | Gasoline | Jet Fuel

Dubai crude price structure under pressure as Indian refiners mull run cuts


Fuel for Thought: Energy security omens returning to haunt oil market

Outlook 2019: China's Fuhaichuang set to return as major condensate buyer


Fuhaichuang restarts newly expanded condensate splitter

May buy as much as 2.8 million barrels/month of condensate

High sulfur condensate may also feed into splitter later next year

Singapore — China's Fuhaichuang Petroleum and Petrochemical is set to return as a regular presence in the Asian ultra-light crude market with the recent restart of its expanded 5 million mt/year condensate splitter, a development that could significantly tighten spare availability of barrels in the region.

Not registered?

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

Register Now

The company, formerly known as Dragon Aromatics, restarted its condensate splitter on December 10.

While the impact of Fuhaichuang's return to the spot market is expected to be minimal in the short term, traders said the company's presence will grow in the coming months as it increases the operating rates at its splitter.

Fuhaichuang is eventually expected to buy as much as four Aframax-sized condensate cargoes per month once its splitter is running at full capacity, an amount that could leave the market in a sharp deficit.

"It will ramp up very gradually. For the first three months, it will probably import one-two cargoes per month at most," a sweet crude trader said.

"Eventually, it should be buying up to four cargoes a month," the trader added.

Asia has long struggled to meet the requirements of the region's condensate splitters, with buyers regularly venturing into the Middle East and Africa to meet their monthly requirements.

Fuhaichuang will be competing with a vast range of buyers across the region, particularly South Korea, the largest buyer of condensate in Asia.

Other regular buyers of condensate in Asia include Japan's JXTG, Singapore's Jurong Aromatics Corporation, Indonesia's Pertamina, Malaysia's Petronas and Thailand's PTT.

Trade sources said Fuhaichuang's return could increase the competition among Northeast and Southeast Asian end-users to secure their monthly supply of ultra-light crude oil next year.

"With naphtha cracks so weak, ultra-light crudes are looking cheap lately ... but the return of this big consumer would support the market next year as demand could outstrip supply, especially due to limited access to Iranian South Pars," a trading manager with a South Korean refiner said.

Fuhaichuang's re-entrance could also help to absorb supply from new projects that has left the market occasionally struggling to clear surplus barrels, trade sources added.

"The market is still quite long, with Wheatstone, Ichthys and potentially Prelude," a source at Thailand's state-owned PTT said, referring to the three LNG projects in Australia that either started up this year or are set to start up soon.

Oilgram News

Platts Oilgram News brings fast-breaking global petroleum and natural gas news every day covering supply and demand trends, corporate news, government actions, exploration, technology, and much more. Click on the link below and we will set you up with a free trial.

Free Trial


Fuhaichuang has already shown an affinity for grades from Australia and Equatorial Guinea as it conducted test runs ahead of the restart of its splitter.

It had earlier bought cargoes of Australia's Pluto condensate and Equatorial Guinea's Alba condensate in Q2 and Q3 and most recently bought a cargo of Equatorial Guinea's Alen condensate for delivery to Gulei, Fujian at the end of January, according to sources.

Company sources said earlier this year that apart from the aforementioned grades, they were also considering Australia's North West Shelf condensate, Indonesia's Senoro condensate, Libya's Melittah condensate and Russia's Purovsky condensate.

Apart from Purovsky condensate, the other grades are also sought by Asian condensate buyers and occasionally the UAE's ENOC. Fuhaichuang's entrance into this space could introduce fierce competition for them.

While the company's condensate purchases will center around low sulfur grades in the near term, the company is expected to gradually shift its feedstock to higher sulfur grades once its 4 million mt/year desulfurizer reaches operational status.

A company source said it was unclear when the desulfurizer will start up, though traders said that it should come online by Q2 2019.

The source said the company intended to switch to grades with a higher sulfur content once the desulfurizer becomes operational.

"We can consider all sour grades, including those from the Middle East and Africa. But we'll have to look at their assay first," the company source said.

The source added that it was unlikely Fuhaichuang would buy Iran's South Pars condensate, as no instructions had been received from the government on accessing the condensate under the current US waiver.

Prior to Fuhaichuang's shutdown in mid-2015, it was one of the largest term buyers of South Pars condensate in Asia, importing 2 million-3 million barrels per month.

Traders said it was likely the company might turn to Qatar's deodorized field condensate or low sulfur condensate as an alternative to South Pars.

Fuhaichuang's condensate splitter is located in a larger petrochemical complex that includes a 90,000 b/d hydrocracker and two 800,000 mt/year paraxylene plants.

The former Dragon Aromatics plant was shut on April 6, 2015 following an explosion, which damaged the infrastructure.

-- Andrew Toh,

-- Gawoon Philip Vahn,

-- Edited by E Shailaja Nair,