Bloomberg/Singapore
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A natural gas conversion plant at the joint Qatar Petroleum-Shell gas-to-liquids venture Pearl GTL. Shell expects most of the naphtha supplies from the $19bn development to go to Asia, where more countries have steam crackers suitable for processing the fuel into petrochemicals and plastics |
State-owned Qatar International Petroleum Marketing Co, also known as Tasweeq, offered spot and term naphtha cargoes from the plant, according to documents sent to potential buyers, obtained by Bloomberg News. This is the first time the naphtha grade has appeared on the company’s marketing tenders, according to Bloomberg tracking of offers.
Qatar also sells full-range naphtha and condensate from its refinery at Ras Laffan.
A 30,000-metric tonne shipment a month from the Pearl facility would be equivalent to about 2% or 3% of naphtha demand in Asia, according to Ravi Narayanaswamy, a senior consultant at Purvin & Gertz Inc in Singapore. “It may have an impact on prices, but not very much,” Narayanaswamy said. “It is when the project starts up fully and there is a steady flow of cargoes that the market will be able to assess the impact on demand.”
The naphtha from Pearl has a boiling endpoint of 180 degrees Celsius (356 Fahrenheit), which is higher than Qatar’s full-range grade at 170 degrees, the documents showed. A higher endpoint requires more heat to “crack” or turn naphtha into chemicals.
The $19bn development will produce 140,000 bpd of liquid fuels such as kerosene and base oil that are normally produced in a refinery, according to Royal Dutch Shell, the builder and operator. The facility will also make 120,000 bpd of condensate and liquid petroleum gas.
Shell expects most of the naphtha supplies will go to Asia, where more countries have steam crackers suitable for processing the fuel into petrochemicals and plastics, spokeswoman Maartje Smellen said on June 23. The company expects its first Pearl naphtha sale in two months, it said at the time.
Shell has already sold a first shipment of gasoil from Pearl, which the company expects will reach full capacity by the middle of next year, it said on June 13.
Naphtha for delivery to Japan, the benchmark price in Asia, rose 1.6% to $959.50 a tonne yesterday, the highest in three weeks, according to data compiled by Bloomberg. Prices slumped for a second month in June as demand faltered amid petrochemical-plant shutdowns in Taiwan and slowing growth in China.