Iran ships condensate to Japan

Jan. 27 (UPI) -- State-backed media in Iran reported Friday that the country has started shipments of an ultra-light form of oil to the Japanese market.

Iran's state-funded broadcaster Press TV cites a director at the National Iranian Oil Terminals Co. as saying about 160,000 barrels of the light oil known in the industry as condensate was shipped to Japan from the South Pars field in the Persian Gulf.

"In September, indications grew that condensate had already found a special position in Iran's exports," the report read. "Iran announced in December that it was already expanding the market for its condensate, which can be used to make both fuel and plastic."

Condensate is not classified as crude oil and therefore not counted toward the managed production decline agreement coordinated by the Organization of Petroleum Exporting Countries. Iran is nevertheless exempt from that agreement.

Japan relies on foreign oil and gas to meet its domestic demands as it has few resources of its own. Condensates from U.S. shale basins were considered a priority for Japan early last year just months after Washington lifted a 40-year-old ban on crude oil exports.

The Japanese shipment follows more advancement for European energy companies into an opening Iranian energy sector. Austrian energy company OMV said it signed a memorandum of understanding with representatives from Iran's Dana Energy Co., a player in exploration and development, to review new arrangements for potential work.

OMV was one of the early movers into an Iranian energy sector that opened up in the wake of a multilateral nuclear deal that brought sanctions relief in exchange for scaled-back nuclear ambitions. European counterparts like French supermajor Total have also waded into the Iranian energy sector by signing memorandums of understanding of their own.