S Korea’s Hanwha Total eyes Iranian condensate amid booming ties

South Korea’s Hanwha Total Petrochemicals is considering buying more condensate from Iran to ease its reliance on Qatar and benefit from Iran’s post-sanctions era, a company source said.

Hanwha Total imported 1 million barrels of Iranian condensate in April for the first time since the lifting of international sanctions on Iran in January.

It had imported a small volume of condensate from Iran before sanctions were imposed in 2011.

“The 1 million barrels of Iranian condensate were unloaded in mid-April,” the source said. “We tested the Iranian condensate and the result was positive; [it was found] to be suitable to our facility,” he said.

“We will consider importing further cargoes from Iran but nothing has been decided yet,” the source added.

Hanwha Total, formerly Samsung Total, operates a 150,000 b/d condensate splitter at its Daesan complex, south of Seoul. It has no CDUs.

The company imports most of its condensate needs from Qatar. Over January-March, it imported 9.59 million barrels of condensate from Qatar, accounting for 55.6% of its total imports of 17.25 million barrels, the source said.

Its other major condensate suppliers include Equatorial Guinea, Libya, Australia and Oman. Hanwha Total is a 50:50 joint venture between South Korea’s Hanwha Group and the French major Total.

Hanwha’s local rival, SK Incheon Petrochem, a subsidiary of the country’s largest refiner SK Innovation, hiked its purchase of Iranian condensate soon after the lifting of the sanctions.

SK Incheon imported 9.11 million barrels of Iranian crude oil, mostly condensate, in Q1, surging from 801,000 barrels a year earlier. It has been heavily reliant on Qatari condensate to run its 100,000 b/d condensate splitter at its Incheon complex on the west coast.

STATE VISIT TO TEHRAN

South Korea’s President Park Geun-Hye is on a state visit to Tehran this week, accompanied by a delegation of CEOs from the country’s major companies.

As part of the visit, South Korea and Iran signed 66 memorandums of understanding Monday, including agreements to build natural gas and crude oil infrastructure in Iran, according to Park’s office in Seoul.

South Korea’s Minister of Trade, Industry and Energy Joo Hyung-Hwan also signed agreements with Iranian oil minister Bijan Zanganeh in the presence of Park and Iranian President Hassan Rouhani.

“Taking more oil and gas condensates is the quickest positive signal we expect to receive from countries,” Zanganeh told state television after the meeting.

“South Korea has increased oil imports from Iran and this figure has tripled compared to the time before the nuclear deal,” Zanganeh said, referring to January 16, when Iran’s deal with six world powers for the removal of sanctions became effective.

State-run Korea Gas Corp and the National Iranian Oil Co. signed a letter of understanding to study the offshore Balal gas field in the Persian Gulf.

In addition, state-run Korea National Oil Corp. and NIOC have agreed to push for storing 2 million barrels of Iranian crude oil and condensate in South Korea, according to a government source in Seoul.

“As part of efforts to boost energy cooperation with Iran, South Korea will increase crude imports from Iran to pre-sanctions levels,” the source said.

South Korea’s imports of Iranian crude more than doubled to 22.85 million barrels in Q1 from 10.25 million barrels a year earlier, making Iran its fifth-largest crude provider.

The country’s imports of Iranian crude totaled 42.4 million barrels in 2015, down 5.6% from 44.92 million barrels in 2014, which was down 6.8% from 48.21 million barrels in 2013 due to the sanctions.

Source: Platts