China Senochem Likely to Get Green Signal for Export of Refined Oil Products
Published By : 01 Sep 2015 | Published By : QYRESEARCH
After over a year long struggle, China based Sinochem Group hopes to get a green signal for the export of refined oil products. Sources said that Beijing is planning to ease the curb on export of fuel in order to ease the domestic oversupply and boost global exports.
An increase in shipment of diesel and gasoline from China would have a further adverse effect on the margin of Asian oil products at a time when the new Middle Eastern refining capacity has already greatly added to the regional supplies.
From January to July this year, China exported an estimated 17.8 million tons of oil products. Customs data revealed that this was up by 8.6 per cent compared to last year and this has aided in fueling margins for gasoil to a new low in five years.
A majority of the leading transportation fuels like diesel, gasoline, and kerosene were being exported by Chinese majors PetroChina and Sinopec. Together these two companies account for a supply of more than 80 per cent in the fuel market in China.
However, state run chemicals and oil trader Sinochem is aiming to be the first company apart from the three giants – PetroChina, Sinopec, and CNOOC – to achieve the export permits and there are many other companies who are lining up to join the bandwagon. Last year, Sinochem began operating its first refinery wholly owned by it.
The company has already begun its pre-marketing efforts to boost fuel exports from its refinery in Quanzhou city, in southeastern China. The refinery has a capacity of 240,000 barrels on a daily basis. This information has been revealed by three sources who have direct knowledge of the matter. One of them also estimated that Sinochem could receive 350,000 tons of exports on an annual quota.