OPEC to Add 2 MBPD Condensates Production

Simmons's assertion of OPEC possessing no spare capacity was DOA; another nail in the coffin is on the way.

OPEC is expected to add 2 million barrels per day (bpd) of liquids production capacity by the end of next year due to projects to expand gas output.

The forecast rise in the amount of condensate and other liquids to be pumped from gas deposits would be equivalent to adding another oil exporter to the group nearly the size of Kuwait, and bigger than either Libya or Angola.

Condensate is almost identical to premium quality light crude oil, and can be processed in petroleum refineries to yield products such as petrol. But it is excluded from OPEC quotas because it is a by-product of gas production. According to the International Energy Agency, which included the new projection for OPEC liquids output in its latest monthly oil market report, the Middle East oil producers Saudi Arabia, Qatar, Iran and the UAE would provide 90 per cent of the additional olumes, with Nigeria accounting for the remaining 10 per cent.

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Almost all the gas developments in OPEC countries that are now due for start-up over the next 18 months were previously delayed by technical complications related to construction and engineering, and by a shortage of skilled labour.

They are proceeding towards completion now that costs have fallen, and supplies of materials, equipment and people needed to build the projects have loosened up. Especially in the Middle East, a chronic shortage of gas to meet rising domestic demand from power stations, water desalination plants and heavy industry ensured that gas projects were not cancelled, and that “expansion plans stay the course”, the IEA said.

Saudi Arabia, the biggest Persian Gulf oil producer, plans 660,000 bpd of new liquids production from its Hawiyah gasfield and from a plant being built to process gas from the Khursaniyah oilfield, which is slated to start production in October. More condensate could come from gas associated with the huge Khurais oil development that was launched last month.

According to the IEA, Qatar is “on track” to ramp up gas liquids output from six gas projects associated with its giant North Field by a total of 545,000 bpd.

The UAE plans to add 340,000 bpd of gas liquids capacity by the end of next year, largely from processing facilities associated with its Habshan oil and gas evelopment.

Iran, which has the world’s second biggest gas reserves after Russia, is expected to boost gas and condensates production from three phases of its big South Pars gas project in the Persian Gulf, in order to supply gas to an enhanced oil recovery project at its onshore Aghajari oilfield. The gas expansion would yield 245,000 bpd of new liquids output from South Pars.

Nigeria plans to start a gas and condensates project in partnership with France’s Total, to include 175,000 bpd of liquids output.

- Brewskie