February 26, 2018 / 9:23 AM / a month ago

Saudi to supply 12 million barrels crude to China's Huajin in 2018 deal

BEIJING (Reuters) - State-run Saudi Aramco has agreed to supply China’s Huajin Chemical Industries Group Corp 12 million barrels of crude oil under an annual deal for 2018, up sharply from last year, three sources with knowledge of the deal said on Monday.

FILE PHOTO: Logo of Saudi Aramco is seen at the 20th Middle East Oil & Gas Show and Conference (MOES 2017) in Manama, Bahrain, March 7, 2017. REUTERS/Hamad I Mohammed/File Photo

Although it’s a fraction of Aramco’s total supplies to China, the annual deal - the second of its kind between the top OPEC producer and the Chinese company - will help the Saudis boost its market share in the world’s largest crude buyer in its race against Russia.

This year’s supply to Huajin, a refinery and chemical complex controlled by Chinese defense conglomerate China North Industries Group Corp (Norinco), compare to an estimated 6-8 million barrels last year, according to two of the sources who spoke on condition of anonymity.

A Huajin spokesperson confirmed the 2018 volume but did not give further details of the supply deal. Press officials with Aramco Asia did not immediately comment.

Russia beat Saudi Arabia to be the top oil supplier to China for the second year in a row in 2017. Robust demand from small, independent refineries boosted demand for Russian oil due to its smaller cargo size and proximity, while the Saudis banked on larger state refiners as key clients.

In May last year, Aramco signed a preliminary agreement with Norinco to build a refining and petrochemical project in Panjin.

Reporting by Chen Aizhu; Editing by Manolo Serapio Jr.

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