NAPHTHA. ( Continued on page 7 ) December 08, 2017

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1 December 08, 2017 Today s Outright Spot Naphtha Prices CFR JAPAN CFR KOREA (Daesan-basis) FOB SINGAPORE ($/bbl) FOB ARAB GULF LR FOB ARAB GULF LR Spread/Differential Price Low High Mean Change NAP-BRENT CRACK INTER-MONTH SPREAD CFR KR SPOT DIFFERENTIAL FOB AG SPOT DIFFERENTIAL Table of Contents Naphtha Prices p. 1 Naphtha News p. 7 Naphtha Papers p. 2 LPG Prices p. 3 LPG News p. 9 Gasoline Prices p. 4 Gasoline News p. 10 Condensate News p. 11 Refining News p. 13 Naphtha Freight Route Value SINGAPORE-JAPAN ($/bbl) 1.94 KOREA-JAPAN ($ 000) AG-JAPAN LR AG-JAPAN LR AG-JAPAN LR 1 (WS) AG-JAPAN LR 2 (WS) Naphtha Cracks 60 27/11 30/11 5/12 8/12 1st Cycle Naphtha Crack 2nd Cycle Naphtha Crack 20.0 Naphtha Spreads NAPHTHA Backwardation at widest in more than 2- ½ years Revised JKT LPG cracking volumes estimated at kt in Jan Arbs persist with Jan-arrival bbls rising to M mt The Asian naphtha market took a breather on the last trading day of the week, while overall sentiments remained firm despite the continuous inflow of arbitrage barrels from the West. The naphtha crack to Brent rose by $2.18/ mt to $131.25/mt, while the inter-month spread widened by $1.00/mt to $12.50/mt, widest since Apr 15, ( Continued on page 7 ) 10.0 Editorial Contacts /11 30/11 5/12 8/12 Inter-Month Spread E-W Spread CFR Korea Differential John Koh jkoh@opisnet.com Jungwoo Hwang jhwang@opisnet.com Ronald Kwan rkwan@opisnet.com Jiwon Chung jchung@opisnet.com Oil Price Information Service (OPIS), an IHS Markit company. 1

2 Open Spec Naphtha Mid-Day Paper H2 Jan H1 Feb H2 Feb Open Spec Naphtha Close Paper H2 Jan H1 Feb H2 Feb Northwest Europe Mid-Day Naphtha Swaps Jan Feb Mar Northwest Europe Close Naphtha Swap Jan Feb Mar Naphtha East-West Spreads Laycan Low High E-W Change Jan Feb Mar FOB Singapore Mid-Day Naphtha Swap ($/bbl) Dec Jan Feb FOB Singapore Close Naphtha Swap ($/bbl) Dec Jan Feb Naphtha vs Propane vs LPG OPIS Asia Naphtha Methodology OPIS Asia assesses the naphtha market in Asia, providing accurate and up-to-date price a s s e s s m e n t s b a s e d o n C F R a n d F O B assessments seen in different markets in the world.. The Asian naphtha assessments reflect spot prices based primarily on deals, bids, and offers done typically on a fixed-price basis, reflecting values prevailing at the close of the market, with priority given to deals done in the markets. OPIS naphtha methodology builds on the basis of the latest CFR FAR EAST OPEN SPEC NAPHTHA CONTRACT agreed upon in the industry. OPIS uses daily forward paper/swaps value as a basis of our Asian daily assessments. While mid-day values are used as a reference, we use the numbers at market close (at 16:30 Singapore time) to calculate OPIS final signature values. In markets where number of trades, bids and offers are limited due to low liquidity, price assessment may be assessed relative to other locations, for example, through direct freight netback CFR JP Prop/Nap, LPG/Nap Ratio /11 30/11 5/12 8/12 H2 Jan Propane/Naphtha Ratio H2 Jan LPG/Naphtha Ratio H2 Jan H1 Feb H2 Feb Naphtha Propane LPG Oil Price Information Service (OPIS), an IHS Markit company. 2

3 Today s Outright CFR Spot Propane Prices CFR JAPAN CFR SOUTH CHINA Today s Outright CFR Spot LPG (11:11) Prices CFR JAPAN CFR SOUTH CHINA Today s Outright FOB Arab Gulf Spot Prices PROPANE* BUTANE* *Dec lifting Today s FOB Arab Gulf Spot Differential PROPANE* BUTANE* *Dec lifting Far East Propane Paper H1 Jan H2 Jan H1 Feb H2 Feb Far East LPG (11:11) Paper H1 Jan H2 Jan H1 Feb H2 Feb LPG CP Propane Swaps Jan Feb Mar Saudi Aramco LPG Contract Prices Date Propane Change Butane Change Dec Nov Oct Sep Aug Sonatrach LPG Contract Prices Date Propane Change Butane Change Dec Nov Oct Sep Aug Industry Events * The OPIS 8th Annual NGL Summit will take place over Mar 5-8, 2018 at the Hotel del Coronado San Diego, CA. * T h e I n t e r n a t i o n a l L P G a s Seminar will take place over Mar in Nikkei Hall, Tokyo. * The 23rd China LPG conference will take place over Mar 21-23, 2018 in Yantai, Shandong. * The IHS Markit 31st International LPG Seminar & Workshop will take place over Apr in Houston, TX * The LPG Connect International Training will be held over Feb 26- Mar 2 at Marina Mandarin Hotel, Singapore Oil Price Information Service Asia 8 Marina View Asia Square Tower 1, #12-01 Singapore LPG Trading window activities ease following recent flurry of deals, widened price spread Sentiments lifted as temperature dips but firm spot cargo talks yet to emerge from NE Asia US arbitrage economics weaken as higher freight slows resale market momentum The Asian LPG market continued to see support in the trading window, albeit at a lower level amid lower activities seen following the recent flurry of trades done this week, but talks about shipping cargoes from the Middle East or from the US stayed rather muted amid growing concerns over the rising freight rates. (Continued on page 9 ) Oil Price Information Service (OPIS), an IHS Markit company. 3

4 Today s Spot Gasoline Prices ($/bbl) 97-RON RON RON Today s Spot Gasoline Differential ($/bbl) 97-RON RON RON Today s Spot Gasoline Cracks ($/bbl) 97-RON RON RON Gasoline Cracks OPIS Asia Gasoline Methodology FOB Singapore assessments generally reflect pricing of products loading 15 to 30 days from the date of publication. In other words, a report for March 1 will reflect reflection of forward prices from March In our assessments, we use a variety of inputs which include outright, floating as well as a combination of both in terms of daily bids, offers and strike prices in the respective oil product market on both the physical and swaps trading. We calculate the mid-value of the trading window by using the weighted average calculation that use the curve of 1st and 2nd cycle of swaps value. Then we add a discount or premium to calculate the FOB Singapore quotes. For discount/premium assessments for FOB Singapore quotes, we take transactions with a minimum size of 50,000 barrels for gasoline /11 30/11 5/12 8/12 97 RON 95 RON 92 RON Oil Price Information Service Asia TEL: TEL: Gasoline Market lifted amid firm demand in SE Asia CPC awards Dec-loading gasoline at good premiums Pertamina seeks mid-dec aviation gasoline FOB Singapore Spot Diff. Calculation (92 RON) Date Bid Offer Deal Diff 23-Dec Dec Dec Dec Dec Dec Dec Dec Dec Jan Jan Jan Jan Jan Jan Jan 8.60 Notional Diff 8.60 Diff 8.53 Asian market was lifted as RBOB rebounded on Friday as crude oil prices picked up again. Gasoline demand in the Asian region remained firm ahead of the year-end holidays. In Singapore, onshore light distillate inventories rose 3.95 million bbls or over 35% to a 17-month high volume of million bbls. The increase in stocks in Singapore signals strengthened demand in the region as the island state is one of S o u t h e a s t A s i a s o i l r e fi n i n g a n d distribution hubs. ( Continued on page 10 ) Oil Price Information Service (OPIS), an IHS Markit company. 4

5 CFR Japan Close Naphtha Swap CFR Propane, LPG/CFR Naphtha Ratio Laycan Pro/Nap Change LPG/Nap Change Jan H2 Jan Feb H1 Feb Mar H2 Feb Japan Swaps vs. Naphtha NWE Naphtha Spot Cargo Flow Economics Jan Feb Mar Apr May Jun Japan Swaps NWE Paper 425 US Para. AG WCI H2 Jan H1 Feb H2 Feb FOB/CFR Prices Freight Naphtha East-West Spread Month-to-Date Avg Propane/Naphtha Ratio Jan Feb Mar Apr May Jun East-West Spread /11 30/11 5/12 8/12 MTD AVG (CP+Fr+Prem)/Nap Swap Ratio MTD AVG Prop CFR JP/Nap Swap Ratio Naphtha Spot Cargo Flow Economics* USG Physical HFRN N+A Para. N M2 UNL MB C CIF NWE Swaps Jan Feb Mar CFR JP-USG Spread JP-NWE Swap Sprd HFRN Jan N+A Feb Para. N Mar Netbacks AG LR WCI MR Open-Spec Nap H2 Jan H1 Feb H2 Feb JP Swaps Jan Feb Mar * Projected values Oil Price Information Service (OPIS), an IHS Markit company. 5

6 Est d Spot Prices with Freight to Japan LPG Mont Belvieu Forward Loading Low High Mean Change Mt. Bel Dec MED Jan A. Gulf* Feb *Dec lifting Propane Spot Cargo Flow Economics CP Swaps Values M. Bel MED* AG H1 Jan H2 Jan H1 Feb Prices Terminal Fees Freight *Estimated level 450 Jan Feb Mar Apr May Jun Propane Swaps 1.20 Month-to-Date Avg LPG/Naphtha Ratio 550 Mont Belvieu Forward Prices /11 30/11 5/12 8/12 MTD AVG LPG CFR JP/NAP Swap Ratio MTD AVG H2 Jan LPG/Nap Ratio 350 Jan Feb Mar Apr May Jun Mont-Belvieu Forward Prices Propane Spot Cargo Flow Economics* Mont Belvieu Dec Jan Feb Mar NWE Forwards Jan Feb NWE-MB Spread Mar Jan Feb Mar CP-NWE Spread FOB AG Jan Propane Feb Butane Mar CFR JP-MB Spread Dec Jan Netbacks MED CFR Japan H1 Jan H2 Jan H1 Feb H2 Feb CP Swaps Jan Feb Mar * Projected values Oil Price Information Service (OPIS), an IHS Markit company. 6

7 NAPHTHA The naphtha price rebounded by $ / mt, with notional values for H2 Jan ending at $600.00/mt, H1 Feb at $594.00/mt and H2 Feb at $587.50/mt. There was one deal concluded during the afternoon trading window, with an H1 Feb lot traded between BP and Glencore at $594.00/ mt. Spot demand for H2 Jan-delivery barrels continued to emerge from Southeast Asia, where Malaysia s Lotte Chemical Titan was heard to have secured about 25,000 mt of cracker-feed naphtha (min paraffinic content of 77%) lot into Pasir Gudang on Friday. On a separate note, it was reported that the firm s cracker expansion work at its Pasir Gudang site has been completed and it has been running at stable run-rates after the completion, according to a source familiar with the matter. With the expansion, Lotte Titan s combined cracker capacity has been increased to 815,000-mt/year compared with 723,000-mt/ year previously. The increase in the cracker capacity by 92,000-mt/year would generate additional naphtha demand of around 23,000 mt each month, according to OPIS calculation. Overall demand for cracker-feed naphtha is expected to stay robust thanks to persistently robust petrochemical margins, while limited LPG cracking in January from the regional end-users would further serve as a momentum. Naphtha cracking margins continued to stay firm, with spot ethylene prices in Northeast Asia seen at $1,280-1,300/mt since the start of the month, according to IHS Chemical. OPIS CFR Japan naphtha assessment averaged at $582.50/mt over the same period, which would translate into notional cash margins of around $ /mt, more than sufficient given that the conventional break-even point needed is about $500/mt. IHS Chemical reported that bullish derivative margins for downstream styrene producers spurred more ethylene cargoes with higher bids, which translated into firm buying ideas of around $1,200 s/mt. Additionally, it should be noted that LPG cracking economics still remained in favor of naphtha, as the month-to-date ratio between LPG and naphtha for H2 Jan was seen at 99.0%, OPIS data showed. The revised survey conducted by OPIS showed that LPG cracking volumes from petrochemical end-users in Japan, Taiwan and South Korea are estimated at 80, ,500 mt in January, which would be slightly higher than the previous estimate but still lower than the same month this year. LPG cracking volumes from South Korean end-users are expected to stay nearly unchanged at 50,500 mt, while the actual cracking volumes that would replace naphtha could be even lower as about 17,500 mt of Oil Price Information Service (OPIS), an IHS Markit company 7

8 propane was reportedly going into propane designated furnaces. Two Japanese end-users, on the other hand, were heard to have bought spot butane cargoes three weeks earlier when butane prices were trading at around $15 s/mt lower than naphtha, which would translate into butane cracking volumes of around 20,000-40,000 mt. On top of that, a Taiwanese end-user is expected to crack only about 10,000 mt of LPG instead of naphtha in January, while another end-user from Southeast Asia is unlikely to crack any propane instead of naphtha. On the shipping front, arbitrage barrels continued to flow into Asia, with the revised data compiled by OPIS showed that around million mt including those vessels on subs could possibly reach Asia in January. Market participants attempt to send arbitrage cargoes from the U.S. Gulf Coast into Asia was notable, as PetroChina was seen attempting to move two 38,000-mt lots into the East for arrival in December and January respectively. A vessel named High Strength is currently sailing into Zhuhai, China from the U.S. Gulf Coast, which is expected to arrive by the end of December. Another vessel named High Saturn chartered by the Chinese firm was also seen attempting to move naphtha from the U.S. Gulf Coast to Asia for lifting over Dec 18, according to shipping sources. In addition, a vessel named STI Steadfast chartered by BP was seen attempting to send about 80,000 mt of naphtha from the UKcontinent (UKC) to Singapore for loading over Dec 10, while an LR2-sized vessel named Sea Star chartered by Novatek was also seen attempting to move naphtha from Ust Luga into Singapore for lifting over mid-december. The arbitrage economics has been improving over the week, with the front-month East-West spread ending Friday at $13.25/mt, compared with $11.00/mt a week ago, according to OPIS data. LPG The January propane CP swaps value closed $5 lower to $583/mt, with the Jan-Feb timespread staying unchanged at a backwardation of around $8.00/mt. In the CFR forward market, one deal was done for the 23,000-mt H2 Jan propane front, with an oil major picking up the bid submitted by a trading house at minus $1/mt to Jan Far East quotes, or around 596/mt. For the H1 Jan delivery, an oil major submitted a bid for a 23,000-mt parcel at minus $2.50 to Jan Far East quotes, or around $594.50/mt, while a trading house placed at plus $10.50/ mt to Jan CP, or around $593.50/mt. An offer was heard for 23,000-mt H1 Jan propane at parity to Jan Far East quotes, which worked out to be around $597/mt. No bids or offers were heard for February delivery cycles for propane, and no bids and Oil Price Information Service (OPIS), an IHS Markit company 8

9 offers for evenly split parcels nor butane parcels as they were on Thursday. more readily used as a heating fuel in the country. As a result, propane assessments for H1 Jan, H2 Jan, and H1 Feb fell by $ to $596/mt, $596/mt and $593/mt, as those for LPG also fell by $ to $580.50/mt, $581.50/mt and $578.50/mt respectively. Sentiments in the market were apparently lifted as temperatures in Northeast Asia continued to dip, paring off some earlier concerns of a possible warmer or later winter as the market gradually moves into seeing some spot cargo talks in the Far East delivery market. While possible buying interests may emerge against the backdrop of higher cancellation or deferments of December-loading US cargoes coming to the East, a main focal point tends to stay on the Chinese import demand, seen as the main swing factor determining the upcoming demand-supply balance. A recent CFR deal was said to have been done with a Chinese importer buying propane for January delivery, possibly at a premium of around low-to-mid teens per tonne, as reported earlier. The Chinese importer may not have the facilities to take in a whole cargo, one source added, it may have bought it through a bigger importer and split the cargo. While the lower temperatures may have boosted sentiments for possible demand from countries like Japan, the impact on Chinese buying is limited, with the natural gas much Incidentally, the higher heating demand in China has led to the recent shortage of natural gas supplied, but impact on LPG has been minimal, one source commented. Well, almost (all heating has switched to natural gas), after all, natural gas is common now very little LPG is used, the source added. Meanwhile, the rising freight rates have led to higher concerns in the market, especially for the arbitrage economics which at one time was edging towards the more favourable side amid the capped prices observed in the Mont Belvieu. However, the rising freight rates were to the extent that is apparently hurting the resale values of propane in the US Gulf Coast, according to observations from OPIS US, despite underpinning support from the higher propane production in the country. Spot chartering rates for Houston to Japan via the Panama Canal were said to have breached the $60/mt mark to low $60 s/mt, up from the $55-57/mt range earlier. And the expectation from the market was that the freight rate for the route will go up higher for the time being, according to OPIS US, with shipowners seeking higher rates following the rising Baltic assessments. The freight rates on the major route from the Middle East to Japan have also breached the Oil Price Information Service (OPIS), an IHS Markit company 9

10 $30/mt market, up by another 72 cents to $30.72/mt. In addition, the higher freight rates may have also contributed to the widening spread between swap levels for CP and for the Far East, which had apparently widening from around $10-11/mt seen earlier this week to around $13-14/mt. It would difficult for freight rates to come down any time soon, given that there is not much available vessels towards the year end and shipowners may even be expecting a premium above Baltic, reckoned one source. Wholesale settlement prices in South China for propane and butane were seen steady at 4,650-4,750 yuan/mt and 4,750-4,7850 yuan/ mt respectively, with the Guangzhou refinery listing prices at 4,550 yuan/mt. Trafigura bought three Dec loading cargoes from Vitol with two parcels for $72.60/ bbl and another for $72.50/bbl each to Singapore quotes. The deals worked out to $8.42/bbl for the first two cargoes and $8.32/bbl for the third cargo to naphtha quotes respectively. Over in Taiwan, CPC had concluded a 30,000- mt 92 RON gasoline tender for Jan-loading from Kaohsiung. The cargo was heard to be sold at premiums of around cents/bbl to Singapore quotes, according to a source with knowledge about the deal. Market is still quite supportive, a trader commented, players are willing to pay the premium to secure the cargo. East China wholesale settlement prices for propane were also heard unchanged at 4,800-4,900 yuan/mt and 4,900-5,000 yuan/ mt for butane, with the listing price at the Jinling refinery heard at 4,810 yuan/mt. CPC Corp produces very good gasoline grades, with high distillation and low sulfur, another trader commented, suggesting that the gasoline cargo has high quality and commands good premium. GASOLINE The gasoline cargoes stored in Singapore can be redistributed to the Southeast Asian countries where there are term and spot demands, a trader commented, explaining the sudden surge in light distillate inventories. Meanwhile in the cash market, there were three 92 RON gasoline deals done on Thursday. The cargo was heard sold to an usual buyer, a market source with knowledge of the deal revealed. Meanwhile in Indonesia, Pertamina had floated a tender seeking four isotanks of 100 LL aviation gasoline totaled at around 92,000 litres for delivery to Surabaya over the second week of December. The tender closes on Dec 11 and is valid until Dec 12. Oil Price Information Service (OPIS), an IHS Markit company 10

11 Pertamina had previously sought six isotanks of the same fuel under its fourth quarter (Q4) term tender. Details of the tender awards remains unclear as not many oil firms are able to fulfill the tender, according to a trader. Market players opined that aviation gasoline remained a niche market as the fuel is usually used for private or small jet planes. Aviation gasoline requires blends that are costly and are usually sought in smaller quantity compared to other products. As a result, these tenders, especially in the Asian region, are often fulfilled by refining majors that are able to achieve profitable blending economics. CONDENSATE Feb DFC, LSC spot diff. may remain steady-to-higher on-month Q1 SPC exports likely to be stable amid normalised production Iran to commence South Pars Gas Field Phase 14 from early-2018 Market sentiments continued to be steady amid persistently robust product margins and relatively tight supply, which are expected to serve as a momentum for Feb-lifting Qatari and Australian spot barrels. The differential for the Qatari deodorised field condensate (DFC) was assessed at around $ /bbl premium to Dubai, while low sulfur condensate (LSC) took the second slot at $ /bbl premium. The South Pars condensate (SPC) spot differential was assessed at $ /bbl premium over Dubai quotes, while that for the Australian North West Shelf condensate (NWSC) was assessed at $ /bbl premiums to dated Brent. Market participants eyes continued to stay on ongoing pre-tender negotiations for the Qatari barrels, where it was heard that one DFC lot could have already been sold from the Qatar Petroleum for the Sale of Petroleum Products Co Ltd (QPSPP). OPIS reported on Thursday that the Qatari firm could have offered one DFC and LSC spot cargo each for Feb-loading in pre-tender, while it might be possible that the firm to offer an additional spot cargo due to a minor splitter outage that was reported at the No. 1 splitter in Ras Laffan. The 146,000-b/d splitter located at Laffan Refinery 1 was reportedly shut over the weekend due to a furnace issue but was likely to have restarted either Wednesday or Thursday following emergency repair, trade sources said. Provided that the splitter outage lasted for about four-to-five days, this would translate into additional volumes of 584, ,000 bbl, while it would also take some more days to ramp up the run-rates. In total, trade sources expected that about four-to-five spot cargoes of DFC and LSC to be available, while one additional lot could Oil Price Information Service (OPIS), an IHS Markit company 11

12 also be offered due to a brief outage at the splitter. Overall condensate demand has been staying firm, thanks to the sustained product margins for both light ends and middle distillates. The trend of bullish naphtha cracks continued to be seen in December, with the month-todate naphtha cracks to Brent seen at $122.48/ mt, while gas oil cracks to Brent has also been steady at $12.698/bbl. Against this backdrop, trade sources expected that differentials for Feb-lifting DFC and LSC spot cargoes to remain steady-tohigher than the previous month s levels. The Phase 14 is aimed to produce natural gas from four offshore platforms with output to be transported to onshore processing facilities via a pipeline that stretches over 100 km. Upon the completion, it is expected to produce 75,000 bbl of condensate and 2 million mt of liquefied natural gas (LNG) annually. It was understood that the Iranian government aims to complete all 24 phases of South Pars by Mar 2019, while trade sources in Asia noted that it could possibly be delayed as the country is still encountering financial constraints due to the U.S. sanctions against the Persian Gulf nation. It really depends on how many spot cargoes are available in the end but provided that they only sell 4-6 lots, both DFC and LSC premium would rise further, said a Singapore-based trader. Margins are so good that whoever need cargoes would have to pay higher premium, the trader added. As reported, the Qatari firm was previously heard to have sold three Jan-loading spot cargoes via a tender and one lot in pre-tender with at least one DFC lot sold at around low $4 s/bbl to Dubai and LSC lots at around lowto-mid $3 s/bbl respectively. Meanwhile, Iran s natural gas supply is expected to increase further with the Phase 14 of South Pars Gas Field that is likely to commence production from early next year, according to Financial Tribune. Separately, trade sources noted that Iran s SPC supply situation is likely to have become normalised after several months of uncertainty concerning production. The tightness in SPC supply was prompted by the pipeline outage at one of trains with 40,000 b/d capacity could have generated a output loss of about 1.20 million bbls, while the field maintenance might have also caused a loss of around 3 million bbls in October. A source familiar with the matter said that the National Iranian Oil Co. (NIOC) was likely to have resumed normal production at South Pars Gas Field and the firm s SPC export volumes are likely to stay stable at around million bbl per month as usual. It was, however, understood that South Korean end-users might only get fixed volumes for the first quarter, while a Middle Oil Price Information Service (OPIS), an IHS Markit company 12

13 Eastern producer could be receiving higherthan-usual term volumes. REFINING NEWS In Malaysia, NewOcean Energy (M) Sdn Bhd, subsidiary of Hong Kong s NewOcean Energy Holdings Ltd, was said to have signed agreements with the Kuantan Port Consortium Sdn Bhd to develop a refinery at the Kuantan Port, according to an industry source. The new Kuantan refinery will produce 3.5 million-mt/year of refined products when completed, and will cost around US$1.22 billion, another source revealed. The refinery will be developed over two phases, with the first taking around 24 months to complete, while the second takes 18 months. With the addition of the Kuantan refinery, regional exports are expected see more competition for export outlets. Apart from that, it was heard that Idemitsu SM Malaysia had recently taken a 240,000-mt/ year styrene monomer (SM) plant offline for turnaround on Dec 1. The plant will likely resume operations in mid- January next year, according to an industry source. The plant utilises benzene as a feedstock for its styrene production. Over in Vietnam, the 200,000-b/d Nghi Son refinery was heard to be 98% completed and the refiner is rushing works to complete the construction by first quarter (Q1) of 2018, according to a source. The Nghi Son refinery, which is co-owned by PetroVietnam, Kuwait Petroleum International, Idemitsu Kosan and Mitsui Chemicals, was said to be fed with the Kuwaiti crude oil when commercial production starts. The refiner had imported 540,000 mt of Kuwaiti crude to-date for its test run. The refinery will be able to produce million bbls of gasoline, 585,000 bbls of jet fuel, million bbls of gasoil, around 58,000 mt of LPG and 31,600 mt of polypropylene in a month. Meanwhile in Myanmar, it was heard that the plans to build its largest refinery was cancelled as the project ran into some unspecified financial constraints. The project, which was estimated to cost around US$2.6 billion was put forward by Chinese developer Guangdong Zhenrong Energy Co. in The refinery with a refining capacity of 100,000 b/d was a joint venture between the C h i n e s e o i l fi r m a n d t h e M y a n m a Petrochemical Enterprise (MPE). Further afield at Saudi Arabia, it was heard that Saudi Kayan Petrochemical has shut several units at its 400,000-b/d Al Jubail refinery on Nov 11 for maintenance and expansion works. Oil Price Information Service (OPIS), an IHS Markit company 13

14 Among the units shut is a 1.48 million-mt/year ethylene cracker, which will be upgraded to increase the capacity to 1.57 million-mt/year. The entire turnaround will take around five to six weeks, an industry source revealed, and the refinery is expected to resume operations by Dec 22. Note: Copyright by Oil Price Information Service (OPIS), an IHS Markit company, 9737 Washingtonian Blvd. Suite 200, Gaithersburg, MD Asia Naphtha & LPG Report is published each business day. OPIS does not guarantee the accuracy of these prices. Reproduction of this report without permission is prohibited. To order copies or a limited copyright waiver, contact OPIS Customer Service at (U.S. only), or energycs@opisnet.com. Oil Price Information Service (OPIS), an IHS Markit company 14

15 OPIS Naphtha Assessment Explanatory Sheet (ONAES) Summary Cycle OPIS Assessment Using Japan Using EW Using NWE Using Brent Swaps Value Spread Change Change H2 Jan spread H1 Feb spread H2 Feb Ref. Value OSN Assessment Explanations 1. One outright deal was traded in the OSN window today. 2. The deal-first principle determined that the value for the H1 Feb assessment as per the trade, is to be at $594/mt. 3. Assessment value for H2 Jan and the H2 Feb will be obtained using the respective inter-cycle timespreads. 4. Since there is/are outright deal(s) done in the market, there is no need to use secondary reference points for assessment. 5. The reference points (Japan Swaps, EW-Spread, NWE-Change and Brent-Change) shown above are only for your reference and valuable input.