REFILE-UPDATE 1-China's May Iran crude imports up 36 pct, 2nd highest on record

Mon Jun 23, 2014 3:20am EDT

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(Refiles to clarify timing of meeting in paragraph 4)

* May imports at 757,900 bpd, +36.4 pct on yr, -5.2 pct on mth

* Jan-May imports up nearly 50 pct on yr

* Top refiner Sinopec stepped up imports; new condensate deal

BEIJING, June 23 (Reuters) - China's Iranian crude oil imports expanded 36 percent in May from a year ago to the second highest on record, customs data showed on Monday, and imports in the first five months of 2014 gained nearly 50 percent over the same year-ago period.

China, Tehran's largest oil client, has since late 2013 been stepping up purchases from the OPEC country after a landmark November nuclear deal eased some sanctions on Iran, making up the main portion of Asia's higher imports since then.

Asian buyers are expected to import about 1.25 million-1.3 million barrels per day (bpd) of Iranian oil in the six months through June, mostly owing to China's increases, industry and government sources have said.

Iran and six world powers met last week in Vienna to narrow differences and keep alive hopes of reaching a final nuclear deal by late July.

China's May imports at 3.22 million tonnes, or 757,900 bpd, eased from a record high of nearly 800,000 bpd in the previous month.

Top refiner Sinopec Corp has since last November been lifting full contract volumes or more of Iranian oil deemed cheaper versus similar grades from Saudi Arabia, industry officials have told Reuters.

The increases were both a result of the state refiner's new push to cut crude procurement costs and the easing sanctions environment, they said.

Also contributing to strong import figures were imports started around last August by an independently-run petrochemicals company in southeast China of condensate, a very light crude oil from Iran's South Pars gas project. China counts condensate as crude oil.

The supplies have until now been on spot or semi-term basis. But from around August, they would be under a one-year term deal that was reached between state-run trader Zhuhai Zhenrong Corp and National Iranian Oil Company (NIOC).

Iran now ranks No.3 among the top suppliers, according to customs, with growth in the January-May period the fastest among China's top suppliers, outpacing that of Iraq, Oman, Angola and Russia. (Reporting by Chen Aizhu and Judy Hua; Editing by Muralikumar Anantharaman)

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