Poland’s largest oil refiner PKN Orlen has delivered a gas condensate cargo of Iranian origin for its Mazeikiai refinery in Lithuania.
The 122,000-tons cargo was shipped to the port of Butinge, Reuters reported. PKN is a major Polish oil refiner, petrol retailer and a significant European publicly traded firm with major operations in Poland, Czech Republic, Germany, and the Baltic States.
There is a growing potential for Iran to increase its gas condensate exports to part compensate for its loss in oil revenues due to sanctions.
As a byproduct of natural gas or oil production, condensates are excluded from the sanctions when produced from a natural gas field, even though they are routinely mixed with heavier grades of oil later for making fuels. Sanctions have limited Iran’s crude oil export to one million barrels per day, but the cap on oil exports does not apply to condensate sales.
Iran is seeking to capitalize on sales of oil products such as petrochemicals and condensates to make up for the drop in oil sales. The main buyers of Iranian gas condensates are the same as its traditional oil customers, namely China, India, South Korea, Turkey, Taiwan and Japan. Recent shipment to the Polish refinery could indicate opening of new markets for Iran’s gas condensate.
There are also plans for the construction of eight gas condensate storage facilities in Assalouyeh, with a total capacity of 640,000 cubic meters. Upon construction of the facility, condensate export is projected to rise from current 400,000 barrels per day to 1.2 million.
The US imposed sanctions on Iran to curb the country’s nuclear program which it claims is geared to military use, but Iran insists it is peaceful. Sanctions have limited Iran’s ability to export crude, and prevented the country from conducting financial transactions related to the sales of oil, and effectively deprived it from its oil revenues.
After eight days of marathon talks on Tehran’s nuclear program in Lausanne, Switzerland, Iran and the P5+1 (Britain, China, France, Russia, the US plus Germany) reached a framework agreement on April 2 that calls for lifting all trade sanctions against Iran. The details of the agreement are to be finalized by a June 30 deadline.
