SEOUL: South Korea’s SK Energy International will import two cargoes of U.S. condensate over the next two months and is also looking at shipments of the light crude from Iran as part of efforts to diversify its sourcing, its top executive said on Thursday.
“We need more condensate,” said chief executive and president Hyung-kun Kim, and more options to source the ultra-light crude other than just from main supplier Qatar.
SK Energy International, a trading arm of refiner SK Energy , will take two 450,000-barrel cargoes of U.S. condensate, one each in June and July, and is “actively considering” imports from Iran, Kim told reporters in a press meeting. Exports of condensate from the United States resumed in 2014 thanks to the softening of a 40-year export ban on crude, and SK Energy imported one cargo last year, Kim noted.
For the June and July imports, SK Energy has already bought two U.S. condensate cargoes from Mitsui & Co, traders said. Reuters shipping data shows one loaded on May 2 onboard tanker Hafnia Australia and is expected to arrive at Ulsan in early June.
One cargo of Mexican crude is also currently on the way to SK Energy, said a spokeswoman at SK Innovation, owner of South Korea’s largest refiner.
The exact shipment and size of the oil were not available, said the spokeswoman. SK Innovation in a statement earlier on Thursday said it aims to boost competitiveness by diversifying crude sources and cutting import costs.
SK Energy joins two other South Korean refiners, GS Caltex Corp and Hyundai Oilbank Co Ltd, in taking Mexican crude. GS Caltex in March bought the oil for the first time in 25 years to take advantage of low prices. SK Energy is also looking at buying condensate out of the United States for trading purposes, Kim said.
If sanctions on Tehran over its disputed nuclear programme are lifted soon, SK Energy will also consider importing fuel oil from the OPEC member, he said. In the meantime, it will look to import as much Iranian condensate as current sanctions allow, he said.
South Korea and other Asian buyers currently take Iranian crude in volumes of just over 1 million barrels per day (bpd). Iran and six world powers are working to reach a long-term accord on ending the decade-old dispute over Tehran’s atomic activities by a June 30 deadline.
Asia’s No.4 economy took in 1.9 million tonnes, or 117,161 barrels bpd, of Iranian crude in the first four months of 2015, down about 14 percent from the same period last year.
