Reuters logo
UPDATE 1-China's 2013 Kuwaiti crude imports steady, Chinaoil buys more Saudi -trade
November 15, 2012 / 10:51 AM / 5 years ago

UPDATE 1-China's 2013 Kuwaiti crude imports steady, Chinaoil buys more Saudi -trade

* Chinaoil to raise 2013 Saudi crude term by a third -trade

* Algeria’s Sonatrach hopes to boost sales to China

* Kuwait’s 2013 term crude sales to China unchanged (Adds details from Algeria, comments)

By Chen Aizhu

SHANGHAI, Nov 15 (Reuters) - Chinese refiners have finalised annual crude supply deals for next year with OPEC producer Kuwait at volumes steady with this year, but at least one company has agreed to take more oil from top exporter Saudi Arabia, trading executives said on Thursday.

Most oil exporters count China among their top buyers as the country has led global oil demand growth for a major part of this decade with a booming economy boosting consumption. China’s refining capacity is slated to rise 1 million barrels per day (bpd) this year as part of a plan to expand total capacity by a third between 2011 and 2015.

China is Iran’s top oil customer and traders are watching for any signs of the world’s second-biggest consumer further reducing its reliance on the Islamic Republic’s oil as Western sanctions make purchases and shipments difficult. Imports from Iran fell 22 percent in January-September.

Oil trader Chinaoil will raise its Saudi term crude volumes to around 160,000 bpd in 2013, up by a third, or 40,000 bpd from 2012. Another trader, state-run Sinochem, will keep purchases from the world’s top exporter steady at this year’s level of around 50,000 bpd, they said.

It is still not clear if China’s Unipec will raise term purchases from Saudi Arabia.

China will keep its term crude imports from Kuwait steady at around 250,000 bpd. This figure is equivalent to around 5 percent of China’s total crude imports.

China is Kuwait’s No.3 client after South Korea and India, taking 8 percent of its production each year.


“Kuwait didn’t really push aggressively in China sales yet, because its oil production has been kept at about 3.1 million bpd,” one executive with direct knowledge of the pact said.

In the absence of extra orders from European buyers, Kuwait has no plans to raise its crude production capacity of around 3.1 million to 3.2 million bpd in the short term, the chief of state-run Kuwait Petroleum Corp (KPC) has said.

But as China adds refining capacity, particularly two major greenfield refineries with which Kuwait could formalise long-term supply, its crude purchases from the Gulf state may rise around 2014/2015, said the trading executive, declining to be identified because he is not authorised to speak to media.

With Kuwait’s output not expected to rise dramatically until 2020, a big increase in supplies to China may mean a cut back to other customers such as Japan, where oil demand is declining, the executive said.

The Chinese refineries Kuwait could tie up for long-term supplies are state-run Sinochem Group’s 240,0000-bpd facility that is set to begin trial production next June, and a 300,000-bpd complex planned by Sinopec, Asia’s largest refiner, in the southern province of Guangdong.

China also finalised term talks with Algeria for 2013, keeping volumes unchanged at about 1 very large crude carrier a month, a trading executive at Algeria’s Sonatrach said. PetroChina is the main buyer of oil from Algeria.

Still, Sonatrach hopes to sell more of its light, sweet crude to China to help the country’s refiners blend the oil with the heavier grades they are buying from the Middle East.

“Sonatrach is a small supplier compared to others as most of Algerian oil is light and sweet,” said a Sonatrach trading executive. “But as China raises the amount of heavier and sour grades, they would need more lighter sweet to mix. The demand is here in China.” (Additional reporting by Judy Hua, Writing by Manash Goswami; Editing by Himani Sarkar)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below