Views:5 Author:Site Editor Publish Time: 2019-05-13 Origin:Site
China's privately owned Hengli Petrochemical has increased its Saudi Arabian crude imports for April and May as it prepares to bring a new refinery in northeastern China to full capacity, according to officials and ship tracking data.
The purchases have kept Saudi crude exports to China elevated so far in the second quarter despite lower global demand during peak refinery maintenance season. Saudi oil exports to China averaged at 1.37 million barrels per day (bpd) in the first four months this year, up from 1.01 million bpd in the same period of 2018, Refinitiv trade flow data showed.
Hengli is expected to lift 6 million to 8 million barrels of Saudi crude in May (194,000 bpd to 258,000 bpd), after loading about 8 million barrels in April, the highest monthly intake since it started trial runs at its 400,000-bpd refinery in December, one of the sources said.
"The plant is now running at 85 to 90 percent capacity. It can reach full capacity very, very soon," said a company executive with direct knowledge of the plant's operation.
A second company source said the plant is targeting May 20 for full operations.
A company spokesman confirmed that Hengli aims to bring the plant - located in the port city of Dalian - to full operation sometime later this month, without giving further details.
From June onwards, Hengli's Saudi oil intake will average around 4 million to 6 million barrels per month, while the remaining supplies will be made up of Iraq's Basra Light crude and Brazil's Marlim grade, said the company executive.
"We like Saudi oil in general, as it yields fairly good margins for the plant," the executive said.
Hengli has signed on to buy 130,000 bpd of crude from Saudi Aramco, a deal that started in the second-half of 2018.
Hengli loaded about 2 million barrels per month of Saudi oil in the first quarter, according to one of the sources and Refinitiv data, helping to keep the company's total liftings so far this year within contractual volume.
Hengli said in March its plant successfully produced oil products and paraxylene, a petrochemical used to make textiles and bottles.
Saudi Arabia was China's top oil supplier for a second straight month in March, overtaking Russia, and thanks to supply agreements with Hengli and another new privately controlled refiner Rongsheng Petrochemical.
Hengli, new to the refined fuel market, has deployed more than 200 employees for domestic marketing, with plans to lease storage space in Tianjin in north China, Yangzhou and Jiangyin in the eastern province of Jiangsu, and Dongguan in the southern province of Guangdong, said the second company official.