Thursday, July 22, 2004. Page 6.
Beijing to Buy More Russian Oil
Reuters SINGAPORE -- China's state-owned Sinopec Corp., the largest refiner in Asia, has sealed its first term contract to lift Russia's sour Urals crude, buying 120,000 barrels per day for a year starting in May, traders said Wednesday.
The one-year deal for a total of 6 million tons will further boost China's imports from Russia, as the world's second-largest oil consumer turns to the No. 2 global producer to reduce its dependence on volatile Middle East supplies.
Russia has already raised its crude supplies to its Asian neighbor by 138 percent in the first half of this year to 5.2 million tons (over 200,000 bpd), almost equivalent to last year's total, Chinese customs data showed.
"There will be more Russian oil coming in the second half," a Chinese trader said.
The crude will be supplied by Mercuria, the recently established trading arm of Urals specialist J+S, oil market sources said.
Under the term contract, Sinopec would lift about half a million tons per month from ports including Novorossiisk on the Black Sea and Gdansk in Poland.
The deal augments an informal arrangement that oil traders say has been under way for more than half a year, with J+S selling at least 270,000 tons (2 million barrels) of Urals to China every month out of Gdansk.
Chinese customs data released earlier Wednesday showed that Russia had become China's fifth-largest crude supplier in the first half of 2004, overtaking Indonesia and Yemen, to account for 8.5 percent of the Asian giant's total crude imports.
In 2003, Russia exported 5.25 million tons of crude to China, or 5.8 percent of China's total.
China's oil demand is racing at double-digit growth and it is importing about 43 percent of its crude requirements.
Crude-oil imports in the first half of the year jumped 39 percent to about 61 million tons (2.5 million barrels per day), customs said. Its imports of crude in June hit a record of more than 11 million tons, or 2.8 million bpd.
Apart from the term deal for Urals crude, China was also boosting imports of Russian crudes by rail.
Oil major Yukos said in March it would more than double rail deliveries of crude to China to at least 300,000 bpd by 2006.
It was not immediately clear whether the financial problems at Yukos would disrupt its sales to China, after a Moscow court ruled Tuesday to sell its main subsidiary, Yuganskneftegaz, which produces over 1 million bpd of crude, about 60 percent of Yukos' output. |
