Refined Development of Condensate Oil
Year:2020 ISSUE:5
COLUMN:ORGANICS
Click:112    DateTime:Mar.07,2020


By Hu Qianqing, CNOOC Energy Technology & Services Co., Ltd. 


Condensate oil is mainly separated from natural gas. A mixture of heavy hydrocarbons in natural gas exist in a vapor state under the high-temperature and high-pressure conditions in the oil layer. These hydrocarbons are condensated from natural gas, as the pressure and temperature are lowered to what for the ground surface in the gas production process, which are referred to as condensate oil.

   The main component of condensate oil is C5~C10 hydrocarbon mixture, but with some impurities. The distillate is mostly at 20℃~200℃. The majority of domestic condensate oil has a specific gravity of about 0.7.

   Condensate oil, as a by-product of natural gas, is mainly used as a raw material for deep processing. It is widely used in the production and processing of oil products and chemical products. According to the properties of condensate oil products in different regions, condensate oil can separate liquefied petroleum gas, naphtha, diesel, jet coal, atmospheric pressure residual oil, etc.


Regional distribution and market profile of offshore condensate oil

   PetroChina, Sinopec and CNOOC are three dominant condensate oil producers in China. By now, more than 60 condensate gas reservoirs of different sizes, different genesis, and types have been found in various oil and gas areas such as Dagang, North China, Xinjiang, and Liaohe. The condensate gas reservoirs are widely distributed geographically, about 80% of which are scattered in the eastern part and the southeast coastal areas of China, and the rest are distributed in the central and western regions.

   1. Regional distribution of offshore condensate oil

   The output of offshore condensate oil is much smaller than that of onshore production due to the bigger difficulties in the exploitation of oil and gas offshore. As of 2019, the annual output of offshore condensate oil in the country was fewer than one million tons. Oil and gas fields are mainly concentrated in shallow waters. Natural gas is often underwater-pipelined to onshore terminals, where the condensate oil is processed and separated. The distribution of offshore condensate oil is mainly shown in Table 1.

   Table 1  Chinese offshore condensate oil market distribution

Region

Landing place

Remark

Northeast China

Yingkou

Self-operated gas field at Bohai Bay, with limited   output


Huludao

Self-operated gas field at Bohai Bay, with limited   output

North China

Tianjin

Self-operated gas field at Bohai Bay, with limited   output

East China

Wenzhou

Joint-venture gas field, with limited output

South China

Zhuhai

Joint-venture Nanhai Sea gas field, with big output


Hainan

Self-operated Nanhai Sea gas field, with the output restricted by   downstream demand


   2. Use of offshore condensate oil

   The condensate oil separated from offshore natural gas, featuring low output, the fluctuation of composition, and uneven regional distribution, has small applications. The main uses are as follows:

   (1) The production of solvent oil: Condensate oil is used to produce solvent oil grades, such as 6#, 120#, 180# and 200#, which are used for blending gasoline and diesel, or for chemical products. 

   (2) The production of fuel oil: Some offshore terminal condensate oil grades are processed to make fuel oil, with an output rate of 20%. The fuel oil produced can be directly used to blend diesel. 

   (3) A supplementary raw material of ethylene: The output of condensate oil at offshore terminals is small, while downstream users have large demand for raw materials of ethylene. Accordingly, most of the condensate oil is sold as a raw material to ethylene plants. 

   (4) A raw material of foaming agent: When the market is bullish, C5 can be separated from condensate oil and then be used to produce foaming agent, but because the amount of foaming agent is very small, the market is easily saturated.

   (5) Crude oil supplementation: Condensate oil can be blended with crude oil to be a raw material for processing in downstream refineries.

   3. Business risks of condensate oil

   Condensate oil is light in weight. It was used to blend gasoline and diesel directly, but with the government’s strict control over the blended oil market, condensate oil producers are required to screen downstream producers rigorously during their operation.

   Condensate oil is normally transported by atmospheric tanks, but if the saturated vapor pressure of the condensate oil is too high, there will be a risk of leakage, so tanker pressure tanks are adopted to replace atmospheric tanks in the transportation, which increases the risk factor.


Future development of condensate oil

   With the expansion of reforming units, the impact of condensate oil on increasing naphtha and gasoline production is getting more and more attention.

   For large state-owned enterprises, specifically Sinopec, PetroChina and CNOOC, adding condensate oil production and condensate oil processing to their businesses will help their crude oil trades and sales of naphtha and gasoline produced by downstream refineries. In addition, with the increase in condensate oil production, LNG and LPG production will increase, which may squeeze the demand for other fuels; the start-ups of ethane crackers and propane crackers will increase the production of ethylene and propylene; at the same time, as there are more light-component condensate oil, the output of naphtha and light-component gasoline will increase.

   The domestic condensate oil market is facing bigger competition. On one hand, the government has imposed stricter regulatory requirements on the operation of the domestic refined oil market, leading to downsized blended gasoline market. This, coupled with the upgraded quality in refined oil, the proportion of the C5 use has dropped from 5% to 3%. On the other hand, competition among products of same category is becoming increasingly fierce. There are many alternative resources including imported condensate oil, light naphtha, and C5 produced by large-scale refineries such as Hengli, which will erode the developing room for condensate oil in the future. Since demand still exists, it is suggested that using small-scale production equipment and applying condensate oil according to product components will be an important way for the development of condensate oil.