Singapore : Abu Dhabi National Oil Co is considering offering a fourth term naphtha cycle starting in October, traders said yesterday.
The UAE state-owned company's move comes ahead of a rise in exports with new production projects coming online soon and since it has sold lower volumes on year in previous cycles.
The producer, one of the top three naphtha suppliers to Asia, currently sells term naphtha in January-December, April-March and July-June cycles on a free-on-board Ruwais basis. It doesn't sell on a spot basis. Adnoc has sent letters to several buyers asking them to indicate interest in fresh supply by June 18.
However, it hasn't mentioned details of the possible new cycle, such as volumes, grades and contract length, according to customers.
"I think the contracts starting from October will likely also last for 12 months," one of them said.
The UAE's two new upstream projects, namely OGD-III and AGD-II, are expected to come online this year.
This will result in more naphtha exports from the country, as the projects will produce both paraffinic naphtha and feedstock for splitters to raise output.
Adnoc could increase annual paraffinic naphtha exports by 1.8 million metric tonnes to about 3 million tonnes, while raising splitter grade supply by at least 700,000 tonnes to 3.4 million tonnes, and maybe even to more than 4 million tonnes if the splitter can operate at full rate, according to traders.
The OGD-III project is already online and operating well except for some start-up issues; it has produced enough condensate for the splitter to raise the running rate from 55 per cent to 80 per cent, consultancy Purvin & Gertz said in its latest research note.
Also prompting Adnoc to express selling interest may be the lower term volumes sold in contracts fetched earlier this year, traders said.
