RPT-ChemChina moving into Singapore oil hub to speed crude buys
(Repeats story from late Thursday with no changes to text)
BEIJING/SINGAPORE Aug 22 (Reuters) - China National Chemical Corp (ChemChina), owner of the country's largest chain of standalone refineries, is opening a Singapore office to take fuller advantage of its right to buy its own crude, sources with knowledge of the matter said on Thursday.
China's newest crude buyer is seeking to accelerate purchases from a wider network of suppliers after getting approval last year to buy crude on its own. Beijing granted ChemChina a 2013 crude quota as it moved to open the second largest oil market to more competition to meet growing demand.
But ChemChina is still not fully free to import crude as and when it needs, because it doesn't have a licence to take oil into the country. After it buys crude, it has to ask one of the five licensed importers to ship the purchase into China.
So far, Beijing has restricted the import licences to the five state-owned majors, including Sinopec Corp and PetroChina.
"The target for ChemChina is to eventually make trading decisions themselves and shake off the influence of their agents," a source close to the company said.
The Singapore office, headed by Wu Hong and Li Shu, former traders from Zhenhua Oil, will take charge of ChemChina's crude purchases, the sources said. ChemChina's Beijing branch will buy straight run fuel oil, another feedstock used at its refineries.
Operations in Singapore are due to start up in September, they said.
ChemChina has a quota to buy 73 million barrels of crude this year and it has bought Russian ESPO, Urals, Oman and West African grades so far. It is not immediately clear how much of the quota the company has already exhausted.
Industry participants see ChemChina's quota as a small step towards opening China's tightly controlled crude market. China may give similar approvals to other refineries next year.
"China doesn't want too many buyers in the market yet although this could gradually change," a Beijing-based trader with a Western firm said.
China's move to free up crude imports bodes well for oil traders as it will create new demand, the trader said.
China's crude imports could reach $500 billion a year by 2020 and China will likely overtake the United States as top oil importer by 2017, energy consultancy Wood Mackenzie said.
(Reporting by Judy Hua and Chen Aizhu in Beijing, Florence Tan and Luke Pachymuthu in Singapore; Editing by Manash Goswami and Tom Hogue)
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