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Posted on December 21, 2013

Singapore-based Concord Energy has sealed a term deal with Qatar's Tasweeq for the first time to lift naphtha, a feedstock for plastics among other petrochemical products, in 2014, industry and trading sources said on Thursday. The trading firm, which also deals with crude and other petroleum products, will be lifting two different naphtha grades from Tasweeq, namely gas-to-liquid (GTL) and plant condensate at premiums of $32 to $34 a tonne to Middle East quotes on a free-on-board (FOB) basis.

Total volumes to be lifted by Concord Energy were not immediately clear, but Tasweeq had previously issued a term tender to sell 200,000 tonnes to 60,000 tonnes of plant condensate for all of 2014, or one 50,000-tonne cargo a month or per quarter. Naphtha has been locked in a bull-run since October as supplies from India were low all through the fourth quarter due to refinery maintenance. Demand, in contrast, was strong.

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This prompted buyers to shell out high premiums to secure cargoes, with the latest spot deal seen done at $41.50 a tonne to Middle East quotes on a FOB basis between Indian refiner MRPL and Japanese trader Marubeni. This was the highest premium MRPL had fetched for a naphtha cargo in about eight months.

Lack of cheap alternative feedstock liquefied petroleum gas (LPG) was another driver behind the strong naphtha premiums as this would mean petrochemical makers have to rely mostly on the light fuel. All these worked in favour of Tasweeq, which also sells full-range naphtha apart from plant condensate and GTL grades. Arcadia Energy, which pulled out of physical trading recently, used to be a term holder of Tasweeq's GTL grade.

Source: Qatar Tribune