Russia's Novatek to maximize naphtha exports in March amid Asia shortage

Formosa Petrochemical

19/03/2026 14:06

Novatek to raise Ust-Luga naphtha exports in March

Easing Baltic ice, output growth enable higher shipments

Asia supply tight due to Middle East conflict disruptions

MOSCOW, March 19 (Reuters) - Russian energy company Novatek NVTK.MM is set to increase naphtha exports from its Ust-Luga complex in March to about 550,000 metric tons, from 360,000 tons in February, market sources said and LSEG data showed.

Rising production in Ust-Luga and easing ice conditions in the Baltic Sea will allow Novatek to boost naphtha exports to Asian markets, where supply challenges due to the Gulf conflict have sent prices to record highs.

The Ust-Luga complex has three processing units with capacity of 3 million metric tons a year each. It refines stable gas condensate into light and heavy naphtha, jet fuel, fuel oil and gasoil.

Novatek processed about 630,000 tons of gas condensate at Ust‑Luga in February, when severe frost and heavy ice caused a shortage of ice‑class tankers, curbing loadings, traders said.

In March so far, processing rates at the Ust-Luga complex have averaged nearly 28,000 tons per day and could exceed 850,000 tons for the month, market sources added.

Novatek did not immediately respond to a request for comment.

SEVERAL ASIAN OPERATORS CUT OPERATIONS

Still, increased flows will not quickly ease tightness in Asia due to the long voyage from the Baltic Sea, traders said.

Asian buyers have faced an unexpected naphtha shortage in March after the U.S.–Iran conflict disrupted Middle East feedstock shipments.

That prompted petrochemical operators, including Singapore refiner and petrochemical major Aster Chemicals and Energy, South Korea's Yeochun NCC YCNCC.UL and Taiwan's Formosa Petrochemical Corp (FPCC), to declare force majeure or cut operating rates.

South Korea's government is discussing with companies the possibility of importing Russian crude oil and naphtha, Seoul's Industry Ministry said on Thursday.

South Korea, a big importer of naphtha in Asia, stopped imports of Russian feedstock in 2023.

Taiwan, once Novatek’s top buyer, halted Russian imports in 2026 under tightening U.S. sanctions, forcing Novatek to divert most cargoes this year to Singapore, LSEG data showed.

The Ust‑Luga complex processed 8.0 million tons of condensate in 2025, up 8.5% from 2024, according to company data.

Last year, Novatek exported about 420,000 tons of naphtha per month from Ust‑Luga to Asia, including Singapore, Malaysia, Taiwan and China, shipping data showed.

 (Reporting by Reuters in Moscow. Editing by Bernadette Baum)