Japan to import naphtha from Iran
Japan is set to import a naphtha cargo from Iran this month, a source said, marking the first such import from the Middle Eastern country since 2011.
Japan’s Mitsubishi is to receive a naphtha cargo from Iran, a source with direct knowledge of the matter told S&P Global Platts.
Asked to confirm whether Mitsubishi is taking a cargo from Iran, the source said ‘not untrue’, declining to elaborate further.
This will be Japan’s first import of Iranian naphtha since the country last imported 47,212 tons in 2011, according to Japan’s Ministry of Economy, Trade and Industry data.
Japanese trading houses and refiners did not import any naphtha from Iran since mid-2012 when the EU imposed a ban on P&I reinsurance cover for Iranian oil shipping, market sources said.
The EU ban on P&I reinsurance cover made it difficult for Japanese importers to take any Iranian oil products, although local refiners have maintained their crude, condensate imports from Iran, using the Japanese government insurance, which only covers VLCCs, sources said.
Despite the lifting of US and EU nuclear sanctions against Iran in January last year, Japanese importers did not take any oil products from Iran because of the unavailability of protection and indemnity coverage from US insurers and ambiguity over reinsurance coverage from American reinsurers.
News of Japan’s Iranian naphtha imports emerged as Iran’s new Persian Gulf Star Refinery shipped its second naphtha cargo. The first went to the UAE, with the second shipped to Japan in late January and due to arrive by a week.
Persian Gulf Star, Iran’s first condensate refinery, is already gearing up for full operations at its first 120,000 bpd train.
“A couple of months ago, the crude distillation units produced diesel, LPG and naphtha. The CCR [continuous catalytic reforming] units are in the pre-commissioning phase. I hope this will take two or three months,” Iran’s Deputy Oil Minister Abbas Kazemi told Platts in Tokyo on January 26.
“Phase two will come maybe six months later, so by 2018 we should have full capacity,” said Kazemi, who is also president of the National Iranian Oil Refining and Distribution Company (NIORDC).
Once fully operational, phase one of the Persian Gulf Star project will produce around 12 million liters per day. “Within six months, we will be self-sufficient,” Kazemi said.
Another two phases at Persian Gulf Star will triple its gasoline output to 36 million liters per day. Combined with three million liters per day of gasoline from the new units at the Bandar Abbas refinery, Iran’s total domestic gasoline production could rise by 39 million liters per day to 103 million liters per day, making it a significant net exporter of gasoline, Kazemi added.