The first shipments of LNG from Prelude signal a new era in Australian condensate exports with the Middle East on the list of importers
The Middle East is becoming an unexpected beneficiary of the increase in Australian crude oil and natural gas liquids. Dubai is expanding its condensate splitter capacity from 140,000 barrels per day (b/d) to 210,000 b/d in 2020. This expansion in capacity was predicated on condensate for Iran’s South Par field. The reversal of US waivers on Iran and the ensuing Tanker War has closed access to this short haul of condensates.
Meanwhile, Australia is expanding its production of condensate and natural gas liquids from the Ichthys and Prelude LNG projects, which exported their first cargoes in October 2018 and March 2019, respectively. The Asian countries of South Korea, China, Taiwan, Japan, Thailand and Singapore are receiving Australian crude oil which is very light and sweet, and condensates. These are seen as substitutes for the unavailable Iranian South Pars output.
According to shipbroker and shipping services provider Simpson Spence and Young’s fixture reports, at least one Australian Wheatstone condensate cargo had also been sold to the Middle East in August 2018. The rise of Australian light condensate exports is a boost for LR2s as the condensate is light enough to pass as a ’clean’ cargo. It is reported that LR2s that have previously loaded dirty cargoes in Asia are ballasting down to Australia to pick up cargoes of the Australian light condensate to warrant a ticket to trade in the clean product trades.
The rise of the South–North trade follows on from the North–South trade in condensate reported in Tanker Shipping & Trade in August 2018 when SCF Angara delivered a cargo of Russian Arctic condensate to Jebel Ali.