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Sinopec's new plant to receive first Saudi oil
Published in The Saudi Gazette on 09 - 05 - 2008

Sinopec Group's new 200,000 barrels per day (bpd) refinery in eastern China will receive its first cargo of Saudi crude in mid-May as it prepares to come fully onstream by the end of the month, sources said on Thursday.
The 2 million barrels of Arab Medium and Arab Heavy crude will be the second imported cargo by the refinery in the port city of Qingdao, following a first cargo of Congolese crude that arrived in March, the sources said.
The Very Large Crude Carrier (VLCC) of Saudi crude will likely be the first of a series to head to Qingdao, as China has raised its imports of Saudi crude via term contracts by a third this year to a hefty 720,000 barrels per day (bpd), ahead of the startup of new refineries.
“I think we'll take more. Our new Qingdao refinery is designed to process heavy and sour grades,” a Chinese trader said.
Top refiner Sinopec, which is more dependent on imports than PetroChina, asked for a 30 percent increase in oil imports from Saudi Arabia for 2008, sources said last year.
Arab Medium and Arab Heavy are heavy and sour, which makes it cheaper than most grades but requires complex refineries to run them.
With its crude throughput estimated at 5.5 million tons up to the end of 2008, the Qingdao complex facility is expected to take some 3.0 million tons, or roughly 22 million barrels, of Saudi crude by the end of this year, said the source.
Saudi crude will account for around 10 percent of the volume consumed in China, the world's second-largest oil user user, this year.
Saudi Aramco, which already owns 25 percent of China's Fujian refinery - the Kingdom's first China investment - has also been eyeing a stake in the Qingdao venture, but negotiations with its Chinese partner have made little headway.
Sinopec started test runs last month at several refining units in Qingdao, including the crude facility and a catalytic cracker, but had to halt them for quick retooling due to minor construction faults, said one source close to the plant's operations.
The refinery plans to start official trial runs later this month and produce its first on-specification oil products by end-May. The first cargo to run through the refinery was to enable the smooth start-up of the new and sophisticated plant, industry sources said.


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