FGE’s detailed assessment of the mid/long-term outlook for condensates provides comprehensive coverage on the key challenges facing the market today. In this study, we forecast condensate supply and demand globally using bottom-up modeling to explore impacts and trends for condensate trade and pricing up to 2030.
2020 was a year where the entire market was turned on its head – after the initial collapse in demand as governments frantically shut down their economies killing oil demand and forcing record production cuts. Strength at the top and bottom of the barrel re-emerged for oil products, while for monomer/polymer markets different market drivers saw olefins and aromatics heading in different directions.
During the height of the global lockdown, associated condensate supply from big LNG/gas producers kept pumping and we saw record low prices for certain grades struggling to clear in the market with vanishing feed demand both from refineries and petrochemical plants. But just as quickly as the demand disappeared, it re-emerged and without US or OPEC supplies, refiners were attracted to the large naphtha cut.
The coming year will be one to watch. On the demand side, a recovery is on the cards following the positive news around a vaccine. Will a recovery in transport fuel markets and petrochemical markets drive a tighter supply/demand East of Suez or will we see another round of large-scale petrochemical additions in China ruin hopes of a better year for integrated aromatics-focused splitters. On the supply side, geopolitics take center stage once again. Will we see the floodgates open for a wave of Iranian South Pars Condensate?
However quality and consistency issues remain for US grades with splitters struggling to deal with the residual component of EF grades as well as other contaminants.
And what about naphtha? Previously flexible splitters turned to heavy full range naphtha. A collapse in naphtha prices in 4Q 2019 has made this an attractive proposition. Is this something structural or just a blip on the radar?
Asian buyers find themselves in a quandary, and the IMO’s potential impact on crude/condensate doesn’t help matters. Do they continue to look to future supplies from the Middle East or do they look for alternative sources? Importantly, does this mean facing additional capital costs to make their splitters “future-proof” for the 2020s and ready for the future condensate supply landscape?
Outlook for 2021
- We look at the various scenarios at play post the US election and the potential for returning South Pars Condensate.
- Key drivers of splitter margins through 2021, from the refinery gate, to aromatics and olefins… what will drive condensate premia in 2021.
- A quarterly outlook on how balances will evolve through 2021.
- COVID-19s impact on upstream project startups. Who are the casualties and what does this means for 2025-2030 condensate supply?
- Closures and additions, who will win the battle along the polyester supply chain in Asia and what does it mean for condensate.
- A look at the new kids on the block – viability of condensate splitter projects in the East of Suez over the next 10 years
- A look at the evolution of condensate balances through the 2020s and what it means for prices.
Latest FGE Multi-Client Studies
Preparing for IMO 2020 and The Future of Bunkering
FGE's detailed assessment of the impact of the IMO 2020 specification changes on the global shipping & refining industries.
The Outlook for Oil 2019
FGE’s core analytical block for its perspectives on future developments in oil demand, supply and prices to 2040.
LPG Forecast 2020
FGE's comprehensive annual assessment of the global LPG market, divided between two geographical areas, East and West of Suez.