South Korea tests US super light oil as Iran waiver uncertainty grows

South Korea’s top refiner SK Energy, above, and the country’s smallest refiner Hyundai Oilbank are studying the WTL’s assay and testing samples. (Reuters)
Updated 04 April 2019
0

South Korea tests US super light oil as Iran waiver uncertainty grows

  • South Korea is one of Iran’s biggest Asian customers, and was one of eight importers that received waivers to keep buying Iranian oil
  • West Texas Light (WTL) is a potential substitute for Iranian condensate because, when refined, WTL yields the petrochemical producing naphtha

NEW YORK/SINGAPORE: South Korea has begun testing super-light US oil sold by energy firm Anadarko Petroleum Corp. as a substitute for Iranian crude as it awaits word from Washington whether it can keep buying oil from the Middle Eastern nation, sources said.
South Korea is one of Iran’s biggest Asian customers, and was one of eight importers that received waivers to keep buying Iranian oil when the United States re-imposed sanctions in November.
Washington is expected to reduce those waivers in May, disrupting South Korea’s supply of Iranian condensate, an ultra-light crude oil that is used in its large refining and chemical industry.
West Texas Light (WTL) is seen as a potential substitute for Iranian condensate because, when refined, WTL yields a large volume of the refined product naphtha, which can be used to produce petrochemicals. Most WTL is produced in the western part of the Permian Basin in Texas.
Anadarko spokesman John Christiansen confirmed the company is exporting WTL, and said they “anticipate those volumes will continue to grow in the future,” although he did not confirm whether South Korea was testing this grade.
South Korea’s top refiner SK Energy, and the country’s smallest refiner Hyundai Oilbank are studying the crude’s assay and testing samples, the sources said.
“The crude’s API seems to be 48 degrees so in a way it’s possible (to replace Iranian condensate) but again we need to check the oil’s quality,” one of the sources said.
The source is referring to the so-called API gravity of the crude, which measures its density and indicates the type of fuels an oil yields when refined.
A spokeswoman from SK Innovation, owner of SK Energy, and a spokesman from Hyundai Oilbank declined to comment.
South Korea’s interest in West Texas Light is occurring as record US oil production and exports have allowed the Trump administration to use energy as a pressure point in foreign policy. Its largest-scale efforts have been sanctions against Iran’s and Venezuela’s oil industry. Seoul has been negotiating with the United States to extend its waiver, saying there are few alternatives to the Iranian condensate it buys, according to a former US official. Yet to gain an extension South Korea will likely have to reduce its current imports by between 5 percent and 20 percent, three sources familiar with the matter said.
South Korea, a close US political ally, also does not want to jeopardize its relationship with Washington. “They’re scared of Trump. They want to be able to say, ‘Look at me, I am buying all your crude,’” said Sandy Fielden, director of oil and products research at Morningstar. In talks last week with government officials, South Korea asked for maximum flexibility by stressing the importance of Iranian condensate for the South Korean petrochemical industry, according to a statement from the Ministry of Foreign Affairs released last week. Washington is trying to cut Iran’s oil exports to less than 1 million barrels per day (bpd), down from more than 2.5 million bpd last May.
South Korea imported about 176,237 bpd of Iranian crude in the January to February period, according to data from the Korea National Oil Corp. (KNOC), down 38.5 percent from the same period a year earlier.
US crude exports to South Korea averaged about 256,000 bpd in 2018, according to the US Energy Department. But, imports in February surged to 443,000 bpd, the KNOC data showed. South Korea has been buying other types of US light crude, but two buyers — SK Energy and Hyundai Oilbank — recently turned down cargoes of Eagle Ford condensate from Texas after the oil was found to contain impurities.
WTL has largely been blended with other oil grades to be sold at the Cushing, Oklahoma, delivery point for US crude futures.


More than 100 Saudi groups at Dubai’s GITEX week

Updated 22 September 2019

More than 100 Saudi groups at Dubai’s GITEX week

  • GITEX is an international platform

DUBAI: More than 100 Saudi organizations, including government entities, private companies and startups, are participating at the upcoming GITEX Technology Week in Dubai, from Oct. 6 to 10, indicating an increase in Saudi participation from last year at the annual technology gathering.

Bringing in one of the biggest contingents at the event, at 114, Saudi Arabia is also an official partner of GITEX this year, which is expecting to host more than 100,000 visitors over four days at the Dubai World Trade Centre (DWTC).

“There’s a lot of collaboration and integration in this region — there’s a lot of learning and sharing. GITEX is an international platform. This is where the Saudi contingent comes — from the big enterprise sector to the startup ecosystem — to interact with hundreds and thousands of visitors from over 140 countries,” Trixie LohMirmand, senior vice president of events management at DWTC, told reporters on Sunday.

LohMirmand also noted a spike in Saudi participation at the GITEX Future Stars, a concurrent event that focuses on the region’s startup community.

“We have a big Saudi Innovation Day. In fact, Saudis are again bringing a big contingent of startups. It’s led by the deputy minister of communications from Saudi Arabia to explore partnerships and discuss the opportunities in the region, particularly for startups,” she said, referring to the three special sessions that will focus on the Kingdom’s technology drive.

This increase in participation, LohMirmand said, is a reflection of a bigger “impetus on innovation and the getting the startup community going” in the region.

“We see a lot of new tech coming out, so there’s a lot of interest to give these companies an opportunity to connect to the rest of the world. When you come to GITEX, we connect you to the rest of the world — we host over 500 investors from all around the world, including from Silicon Valley,” she added.

Firat Aktas, DWTC’s director of brand innovation and communication, stressed: “You can see what’s happening around the world — the Saudis are showing their ambition very clearly in various industries.”

Earlier this year, the Saudi Telecom Company signed a deal with Swedish telecommunications company Ericsson to launch commercial 5G services in the Kingdom. “The roll-out continues. It’s a huge deployment in different parts of Saudi Arabia,” Wojciech Bajda, head of Gulf Council countries and global customer unit zain, told Arab News. “The focus for our customers currently is to understand how to monetize 5G, how to make sure there’s an industrial application of 5G in Saudi Arabia.”

Bajda also said they are looking at introducing 5G to different sectors in the Kingdom such as mining, and oil and gas. “We have engagements with different industries in trying to prototype together, and see if there’s something relevant for Saudi Arabia, and for our customers like the Saudi Telecom Company to pick up and do a full implementation,” he added. 

What to expect at GITEX this year 

This year’s GITEX, which has the theme “Synergizing the Mind and Technology Economy,” will highlight the region’s 5G adoption, as well as other futuristic concepts such as artificial intelligence (AI), robotics, and immersive technology.

LohMirmand said the dwelling time for GITEX visitors has increased over the years, owing to the gathering’s massive content offering.

“We are measuring more in terms of dwelling time. You can have 100,000 people come one day and do, but now the trend for us is we’re seeing them staying longer. Because there’s so much content, there’s so much knowledge, and so many companies with new technology, dwelling time is much longer, averaging 3.5 to 4 days,” she explained.

“Visitors and exhibitors are having deeper and more meaningful interactions at the show.”

The halls of DWTC will be divided into six sectors: 5G, AI, Future mobility, GITEX lifestyle tech, and Smart cities. It opens Oct. 6.