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(MENAFN - Arab News) To feed expanding refining capacities, China's Sinopec Corp. said on Tuesday it would buy about 1 million barrels of crude per day from Saudi Arabia next year, a volume nearly 30 percent above the current rate.
The No.1 refiner in Asia aims to process 205 million tons of crude in 2010, or 4.1 million bpd, its president Wang Tianpu said, a target 14 percent higher than the average rate of 3.59 million bpd for the first three quarters of this year.
The expansion comes against a backdrop that demand in the world's second-largest oil user is set to maintain robust growth after rebounding from sharp slowdowns in late 2008 and early 2009 on the back of the Chinese economy's recovery.
The stronger link with Saudi Arabia, the world's largest oil exporter, has become more obvious after the start of the Kingdom's first China refinery in Fujian earlier this year and its ongoing interest in participating in a second one. "Saudi Aramco will supply China about 50 million tons of crude a year in the upcoming few years and the volume should increase from year to year," Wang told reporters.
For the first nine months, Saudi Arabia supplied 780,000 bpd crude to China, 15 percent higher than a year ago, official customs data has shown, the bulk of which went to Sinopec.
Wang made the remarks during the launching ceremony of a $2.7 billion petrochemical plant, a joint venture with Saudi Basic Industries Corp. (SABIC) that is scheduled to start up in the first quarter of 2010 in the northern port city of Tianjin.
Prince Saud bin Abdullah bin Thunayan, president of SABIC who was present at the launching ceremony, hoped the joint venture would usher in a new era of cooperation between the two companies.
Wang also said SABIC would supply 10 million tons of crude to the Tianjin plant, which is adding a new 200,000-bpd refinery to the petrochemical works.
Wang didn't give details as to when or over which period the supplies will come through. SABIC traditionally does not involve in crude supply business.
When asked about the talks between Sinopec and Saudi Aramco over investment in China's Qingdao refinery, a 200,000-bpd plant that went into operation in May 2008, Wang said: "We are still in discussion and are very hopeful of reaching a deal."
Aramco and its partner Exxon Mobil now each hold 25 percent in Sinopec's Fujian refining and petrochemical venture that went online earlier this year.
Wang also said Sinopec will add between 240,000 to 300,000 bpd refining capacity each year in the next three years.
Sinopec's refining capacity will rise to 200 million tons, or 4 million bpd, by the end of this year, a rate that is obviously too conservative given the firm made the same estimate for 2008.
The rate is about 20 percent more than the firm's refining capacity of 166 million tons at the end of 2007.
Chinese authorities have recently quietly endorsed new plans to increase domestic refining capacity by 40 percent by 2015, focusing on the expansion of existing sites rather than building new plants.
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