Bloomberg News

Dubai to Curb Reliance on Iranian Condensate, ENOC’s CEO Says

April 15, 2013

Dubai’s state refining company, which buys most of its condensate from Iran, is seeking alternative sources of the fuel to curb imports from the Islamic republic and avoid running afoul of international sanctions.

Iran is “still the major supplier,” Saeed Khoory, chief executive officer of Emirates National Oil Co., said today in an interview in Dubai. “We are trying to find other sources.”

ENOC, as the refiner is known, wants new suppliers of condensate because U.S. sanctions threaten financial penalties for companies that trade with Iran. ENOC said in February it had signed a contract with the Gulf sheikhdom of Qatar for a year’s supply of condensate. ENOC operates a 120,000 barrel-a-day condensate refinery that splits the light crude into oil products such as naphtha, reformate, jet fuel and diesel.

The company, based in the second-largest sheikhdom in the United Arab Emirates, was already buying some condensate from Qatar on the spot market. The term contract with Qatar will allow ENOC to buy more fuel than it can secure under spot purchases and guarantee more reliable supply, Khoory said. ENOC agreed to buy 20,000 barrels a day of Qatari condensate annually.

That would mean ENOC is still buying as much as 100,000 barrels a day from Iran. When asked about that figure, Khoory said: “It depends.” The company can buy less of the fuel from Iran once it lines up other suppliers, he said, without specifying whether ENOC was trying to cut purchases of Iranian condensate to zero.

“We are trying to reduce our supply from Iran,” Khoory said when asked whether ENOC would eliminate Iranian condensate imports. “You always have to diversify.”

ENOC said in February it had bought 20 percent less condensate from Iran in the second half of 2012 than in the first six months of that year.

The company’s only refinery, at the port of Jebel Ali in Dubai, is running at its full daily capacity after maintenance in December, Khoory said.

To contact the reporter on this story: Anthony DiPaola in Dubai at adipaola@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net


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