Energy firms look to revive crude, condensate inflows from Iran

South Korean energy firms are gearing up to lift crude and condensate purchases from Iran as soon as sanctions are lifted, reviving inflows that have nearly halved since 2012 when the restrictions were imposed, Jae-do Moon, Vice Minister at South Korea’s Ministry of Trade, Industry and Energy said.

“Just like many other foreign companies, South Korean companies are also preparing for the removal of Iranian sanctions, while seeking more business opportunity with Iran,” he said.

Moon’s comments on increased interest in cargoes from Iran come just after a South Korean delegation, comprising government and company officials, visited Tehran in August, becoming the latest in a series of high-ranking delegations — including those from Germany, France, Italy, Japan and the UK — to visit Iran in the weeks following the landmark nuclear deal in mid-July.

Moon, who is in charge of energy at the ministry, said as Seoul prepares for increased inflows of crude and condensates from the Middle Eastern supplier, South Korean companies are also “paying greater attention” to energy-related business opportunities in Iran. In the first seven months of the year, South Korea’s imports of Iranian crude averaged 111,665 barrels per day down 11 percent from a year ago, according to the state-owned Korea National Oil Corp.

Commenting on the additional volumes that South Korea might be looking to buy from Iran post sanctions, Moon said: “At the moment we do not have a specific target for crude oil imports from Iran.”

International sanctions have seen the volume of crude, that Iran used to sell, fall from around 2.3 million barrels per day before the sanctions, after its remaining customers agreed to reduce imports to avoid falling foul to US financial measures in place since mid-2012.

In July, South Korea imported 1.17 million barrels of condensate from the US. The country imported a total of 2.61 million barrels of US condensate for the first seven months of 2015, compared with 1.66 million barrels South Korea in all of 2014.

Since the second half of 2014, US condensate exports began flowing into Asia after confirmation by the Commerce Department in June that condensates processed through a distillation unit, or stabilizer, as a petroleum product that may be exported without a license.

South Korea’s refining sector had the ability to compete in the regional market but in order to maintain that, there was a need to make additional investments and boost productivity, he added.