Qatar condensate plant gives it refining edge
Doha, June 9, 2010
Qatar's plans to double the size of its condensate refinery in Ras Laffan will not only boost its capacity to pump diesel and other middle distillates but will also give it an economic edge over other regional refineries, say analysts.
It is cheaper to convert condensates to high value fuel such as diesel and jet fuel than it is to process much of the region's crude that is used by competing refineries.
The world's largest liquefied natural gas (LNG) exporter is set to boost its condensate production to 750,000 barrels per day (bpd) by 2014, more than double current output of around 350,000 bpd and almost as much as the Opec member's daily crude output.
Output of this light and low sulphur crude equivalent has risen rapidly in Qatar as it boosts LNG export to 77 million tonnes per annum (tpy) this year, and comes cheap to the refinery as a by-product of gas output.
"Qatar is going to be able to offer a better price, and deal for its customers just because this condensate is coming to them at next to nothing," said Al Troner, president of Asia Pacific Energy Consulting (APEC) in Houston.
This would give it an advantage over other refineries under construction or in the planning stages in the region with heavier crude feedstock.
"At the end of the day its a numbers game, if you can refine high end products on the cheap and sell them much higher, you win... that is the case with the Qataris," an Asian-based energy analyst said.
The inter-Gulf oil products market is growing fast as demand rises rapidly in the region. Gulf countries are also set to compete for export markets in Europe and Asia as they build refinery capacity as part of efforts to industrialise and to take a bigger slice of profits further down the oil supply chain.
Not only would production of quality fuel rise with the Ras Laffan expansion, but condensate will give it more flexibility than crude refineries to meet shifting demand patterns through changes in refinery configuration. - Reuters