Iran’s Feb loading LPG exports seen at 382,000 mt vs Jan’s 451,500 mt: sources

Iran’s LPG exports loading in February are estimated at 382,000 mt, compared with 451,500 mt in January, shipping sources said, keeping 2022 outflows on track for the projected 6 million mt.

Shipments loading in December totaled 531,000 mt, while loadings in November were at 539,500 mt and October at 363,500 mt, sources said.

Exports in 2021 peaked in September around 556,000 mt, S&P Global Commodity Insights reported earlier.

January-loading shipments included seven cargoes comprising 33,000 mt of propane and 11,000 mt butane, two 44,000 mt evenly split cargoes, a cargo comprising 15,000 mt of propane and 8,000 mt butane, a cargo comprising 10,000 mt of propane and 12,000 mt butane, a 4,000 mt evenly split parcel — all loading from Assaluyeh — and a 20,000 cargo of either propane or butane loading from Siraf.

February-loading shipments included six cargoes of 33,000 mt propane and 11,0000 mt butane, two 44,000 mt evenly split parcels, a 22,000 mt lot of either propane or butane, a parcel of 3,000 mt propane and 1,000 mt butane, a 4,000 mt evenly split parcel — all loading from Assaluyeh — and a 44,000 mt cargo of either propane or butane loading at Siraf.

Bandar Siraf port in the central district of Kangan County, Bushehr province was officially inaugurated in September 2021 after undergoing trial operations in February.

The shippers included South Pars Gas Co., or SPGC, Parsian Sepehr Refining Co., PARS, Palayesh Parsian Sepehr, and National Iranian Gas Company, or NIGC.

Talks between Tehran and Washington to revive the 2015 nuclear deal that could restart normal exports of Iran’s oil and gas remain uncertain following Russia’s demand for written guarantees from the US that the sanctions it faces over Ukraine’s invasion will not hurt its trade with Iran.

Monthly flows from Iran mostly go to China despite the US sanctions, facilitated by Chinese shipowners who have developed an armada of very large gas carriers since sanctions were imposed on Iran in 2014 and then in 2018, trade and shipping sources said.

Iranian LPG exports could be higher without the restrictions that international shipping and trading firms face due to the sanctions related to the oil producer’s nuclear program and allow Iranian exporters to resume access to the global VLGC fleet, sources said.

Cautious wait

Sources familiar with the matter were not yet confident that the US State Department’s decision early February to restore a sanctions waiver allowing third-party participation in nuclear non-proliferation and safety projects could expedite normal flows of oil and gas, including LPG.

“Nothing has been finalized and we don’t know exactly whether these waivers are for crude only or including the products. The negotiations are going on,” one source said. “Please note that in case of any agreement, it takes some time that the banks start Iran business and won’t be immediate. Once the sanctions are lifted and depending on the policy of the shipowners, the number of the vessels calling in Iran will be gradually increased. We need to wait … to have a better view on the negotiations and outcome.”

Analysts have said Iran is expected to boost exports by 1.9 million mt in 2022.

Iran aims to bring onstream 130 million cu m/d of additional gas production capacity in 2022, including gas from the delayed phase 11 of offshore South Pars field and emergency onshore operations, as domestic consumption surpasses production, Mohsen Khojastehmehr, managing director of National Iranian Oil Co. was quoted by students’ news agency ISNA in December.

Expecting a US-Iran agreement could be reached shortly, Lim Jit Yang, S&P Global Commodity Insights advisor for oil markets said their reference case assumes a full return to the 2015 Joint Comprehensive Plan of Action will trigger full sanctions relief by May and boost oil production by 750,000 b/d by August, plus 300,000 b/d of exports from storage.

FOB Middle East LPG prices have been rallying in 2022 driven by strong Brent crude futures and a recovery in demand led by the petrochemicals sector, following a pause because of easing winter-heating demand.

FOB propane averaged $801.55/mt in February, up from $746.52/mt in January and $692.7/mt in December, S&P Global data showed. FOB butane averaged $812.61 in February, up from $737.67/mt in January and $664.16/mt in December.
Source: Platts