China's Unipec ramps up US crude imports
Singapore, 25 September (Argus) — China's state-controlled Unipec bought 36mn bl (150,000 b/d) of US crude in January-August and is likely to continue its buying spree for the rest of this year, senior analyst Wang Pei said at the Asia Pacific Petroleum Conference (Appec).
The firm's US crude imports have surged from 23,000 b/d in 2016 as a whole. Unipec, the trading arm of China's top refiner Sinopec, is currently the biggest buyer of US crude in China and has taken grades including WTI, Eagle Ford condensate, Mars and Southern Green Canyon.
Relatively steady Chinese crude production and rising domestic crude runs will lead to higher imports, part of which will be met by US crude, Wang said.
Crude runs in China could rise to almost 13mn b/d by the end of 2019 while domestic production may only edge up to just above 4mn b/d, keeping crude import volumes high. China's net crude imports were around 8.17mn b/d in July, while crude production was 3.7mn b/d. Refinery runs were 10.7mn b/d, Argus estimates.
Buyers could be able to lift US crude in 2mn bl cargoes soon because of planned expansions at US export terminals. This could reduce the freight cost of moving US crude to Asia-Pacific by around $1-1.50/bl, Wang said.
Buyers can already bring a 2mn bl very large crude carrier (VLCC) of US crude to Asia-Pacific. But loading such a vessel in the US Gulf coast would currently mean buying 3-4 Aframax cargoes to fill the VLCC, potentially from different sellers and with different loading times, which could prolong the loading process and lead to demurrage costs.