The Isthmus of Kra

A Good Location for a Condensate Splitter?

Recent proposals for creating an oil shipping and refining center in Southern Thailand are based on the strategic factor that transporting oil by pipeline across the Isthmus of Kra could save several days shipping time from shipments of oil from the Persian Gulf to East Asia. The problem with these proposals is that such a route would bypass Singapore with its large exisiting oil refining capacity. Any new oil refinery in the region is likely to operate at the expense of existing refineries because the volume of crude oil coming fron the Persian Gulf will probably not continue to increase. Since refinery profitability depends on running at or near full capacity, the economics of building new refineries could suffer.

An alternative approach would be to concentrate on the trade in condensate, a volatile liquid hydrocarbon that is a byproduct of natural gas production. Because the natural gas resources of the Persian Gulf Region are still at an early stage of development, condensate exports from the region are likely to increase over the next two decades. A condensate splitter is like an oil refinery but works by simple distillation; there is no need for costly coking or reforming units. Distillation of condensate typically yields up to 70% gasoline, with middle distillates and naptha making up the remainder. Middle distillates include diesel and jet fuel, which are quite valuable. The one low-value product of a condensate splitter is naptha, which can be processed in a naptha cracker to yield petrochemical feedstocks.