OREANDA-NEWS. January 23, 2013. Iran has changed the pricing of its term exports of South Pars condensate to China's top refiner, Sinopec Corp, this year, effectively raising the premium on sales of the super light crude to its top client, Chinese industry sources said, Reuters reported.

 Tough sanctions by the United States and Europe to force Iran to curb its disputed nuclear program have already slashed Iran's oil exports by more than half in 2012, costing it more than USD5 billion a month.

The reduced cash flow has contributed to a plunge in the value of Iran's rial currency.

Officials said the change was agreed between the National Iranian Oil Company and Sinopec last year and takes effect from 2013.

The change has led several Sinopec plants to moderately reduce their contracted amounts for this year, though it was not immediately known by how much. Last year, Sinopec was contracted to lift about 70,000 barrels a day.

Condensate forms a small part of Sinopec's Iranian oil imports, but its purchases from the Middle Eastern country last year are estimated to have been worth about USD2.5 billion.

The Chinese refiner, the world's largest processor of Iranian crude oil, was contracted to buy about 430,000 bpd of Iranian oil last year.

From January, Sinopec's South Pars condensate purchase will be priced at a discount of USD 6 a barrel to Iran Light crude, versus the previous Dubai minus USD 5, the sources told Reuters.

The Iranian condensate, produced from its giant South Pars gas project, is an ideal feedstock for making petrochemicals.

Under the new pricing, the condensate would be equivalent to roughly Dubai minus USD 3.8 a barrel using the yearly average of Iran Light for 2012, officials estimated.

That would mean an additional revenue to Tehran of some USD 30 million if exports are kept unchanged at last year's amount.

Iran has also raised the prices of crude it sells to term customers in Asia in the first quarter this year, its first hike in six months.

"It was something agreed upon last year. It would be losing face for China to ask for a change now," said one source.

"The Iranians felt it was not the right way of pricing to just link condensate with Dubai, as almost all of the Middle Eastern crudes are priced over Dubai and Oman. The linkage with Iran Light will have that effect," said a second official.

All the sources Reuters spoke to have direct knowledge of the price change and declined to be identified due to the sensitivity of the matter.

But even with the change, the Iranian supplies remain more attractive than competing supplies from Qatar and Australia, which have been trading at premiums to Dubai quotes for most of 2012, traders said.

Besides Sinopec, Dubai's Emirates National Oil Co (ENOC) is a large term buyer of Iranian condensate.

Japan's top refiner, JX Nippon Oil & Energy, imported about 24,000 bpd last year, while South Korea's Samsung Total Petrochemicals stopped imports of Iranian Kangan condensate in 2012 due to sanctions.

Dragon Aromatics, a petrochemical producer owned by Taiwan's Xianglu Group that operates a giant 800,000 tonne-per-year paraxylene plant on China's southeastern coast, recently became a new buyer of the Iranian oil.