BEIJING: 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 January, PetroChina’s Dalian Petrochemical Corp started to take more Russian crude, pumped in via the East Siberia-Pacific Ocean (ESPO) pipeline, replacing some 100,000bpd of Saudi supplies, officials said.