China's Yanchang seen doubling Russian oil purchases - sources

Yanchang Petroleum International

07/08/2023 09:34

By Chen Aizhu
       SINGAPORE, Aug 7 (Reuters) - China's state-controlled
Shaanxi Yanchang Petroleum Group is expected to double its
purchases of Russian ESPO blend this year to about one million
metric tons, according to two sources familiar with the plant's
operations. 
    The company is due to start up a 50,000 barrels per day
crude processing unit at its refinery in landlocked Shaanxi
province in the north later this month, after retooling work
that allows the plant to process more crude, the sources said.
    Chinese refiners, led by independent plants based in eastern
Shandong province's refining hub, are maintaining strong
interest in the light sweet crude exported from Russia's Far
East port of Kozmino, bolstering the Russian oil's prices to
multi-month highs. 
    An official with Yanchang's refining division said the plant
will likely process more imported crude oil this year, but did
not comment specifically on Russian crude. 
    The Yanchang plant has bought three ESPO cargoes for August
and September deliveries into Qingdao port, according to trading
sources who closely follow ESPO transactions.  
    That will bring Yanchang's total purchases so far this year
to 600,000-700,000 tonnes, about 4.4 million to 5.1 million
barrels, one of the sources added. 
    Apart from the revamped crude processing unit, Yanchang also
has remaining crude quotas to use up by the end of the year, a
second trader said. 
    From Qingdao port, Yanchang transports the crude oil by
rail, taking about a day to reach Shaanxi's Yulin city, where
the plant is based.
    Backed by the Shaanxi provincial government, Yanchang
Petroleum is a rare regional oil and gas producer outside the
national energy majors. It also invests in large
coal-to-chemicals businesses.   
    The refining subsidiary processed nearly 14 million tons of
crude last year, or 280,000 barrels per day, local state media
has reported. 
    

 (Reporting by Chen Aizhu; additional reporting by Beijing
newsroom; Editing by Sharon Singleton)
 ((aizhu.chen@thomsonreuters.com; Reuters Messaging:
aizhu.chen.reuters.com@reuters.net))