BEIJING, June 9 Revamping a PetroChina
subsidiary refinery to process sour crude is taking months
longer than expected, cutting the firm's crude oil purchases
from Saudi Arabia, two industry sources said.
PetroChina Guangxi Petrochemical, which operates a
200,000-bpd refinery in the southern coastal city of Qinzhou,
was earlier expected to finish a retooling programme by around
April to start processing high-sulphur Saudi oil, but that is
being delayed until August at the earliest, the sources said.
That, together with another PetroChina plant which switched
to Russian from Saudi oil from January this year, contributed to
a surprise 13-percent fall in China's Saudi crude oil imports
for the January-April period.
Traders had in early 2014 expected Saudi Arabia, China's top
crude supplier, to ship in steady volumes of oil to Chinese
buyers this year, as they did last year.
Once the revamp at the Guangxi plant is completed, the
refinery will be able to take 100,000 barrels of Saudi oil a
day, said one trading official with direct knowledge of the
supply situation. He declined to be named as he is not
authorised to speak with media.
"Looks like the Guangxi plant will only be able to start
loading Saudi oil towards the late part of the third quarter,"
said the trading source.
"It's hoped that (Saudi) supplies will catch up in the later
months of the year."
The Guangxi plant delay could still result in an overall
fall in China's Saudi crude imports for the whole of 2014,
despite small incremental requirements from a separate Chinese
refinery, the newly-started Quanzhou plant in southeastern
Fujian province run by state-run Sinochem, said the source.
From this January, PetroChina's Dalian Petrochemical Corp, a
subsidiary refinery in the northeast port city Dalian, started
to take more Russian crude, pumped in via the East
Siberia-Pacific Ocean (ESPO) pipeline, replacing some 100,000
bpd of Saudi supplies, officials said.
The PetroChina Guangxi refinery, which started operating in
September 2010, was initially designed to process mostly
low-sulphur sweet crude from Sudan, where PetroChina's parent
company CNPC is a major investor and oil producer.
But disruptions in Sudanese oil exports due to conflicts and
violence in the region, as well as poor economics of processing
lower-sulphur grades led to PetroChina's decision to revamp the
plant, industry officials have said.
Units such as residue desulfurization, diesel and gasoline
hydrotreating facilities will be added under the overhaul.
(Reporting by Chen Aizhu; Editing by Joseph Radford)