FocusIndia's naphtha exports to surge in Dec

29 October 2007 05:15  [Source: ICIS news]

By Nurul Darni

SINGAPORE (ICIS news)--Heavy imports of liquefied natural gas for power plants will keep the pressure on local refiners to sell their naphtha abroad and push exports beyond 900,000 tonnes for December loading, traders and producers said on Monday.

With naphtha prices soaring to record-high levels, India’s power producers have turned to natural gas as feedstock, freeing up more supplies of naphtha to be exported to the open market, they added.

Asia’s open spec naphtha prices rose to as high as $800-803/tonne CFR (cost and freight) Japan level last week, when NYMEX crude futures passed the $92/bbl mark. NYMEX crude has remained stubbornly high on Monday in after hours trading in Asia, currently surpassing the $93/bbl level.

“Naphtha prices could continue to shoot through the roof. It makes a lot of sense for Indian refiners to export more naphtha since export prices are also getting higher,” a naphtha trader in Tokyo said.

Asia has seen rising naphtha exports from India in the past few months this year, with volumes reaching as high as 1m tonnes for September and October loading respectively.

For November loading, Indian refiners have so far offered 210,000 tonnes of spot naphtha in addition to 150,000 tonnes that were already offered through term arrangements.

Expansion at India’s Essar Oil Vadinar refinery from mid November could also set the stage for more naphtha exports that could potentially flood the market, traders said.

Its 210,000 b/d Vadinar refinery, set to be the second biggest in India by capacity, is expected to hit full rates by next month, traders familiar with the situation said.

Essar Oil typically exports 70% of its products, they said.

Other state-owned refiners such as Indian Oil Corp and Hindustan Petroleum Corp Ltd are also expected to maintain their naphtha export volumes at high volumes in December by around 100,000 tonnes each, as no refinery maintenance is scheduled towards the end of the year, traders said.

By: Nurul Darni
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