Friday, 05 December 2008
updated 1 minute ago
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Saudi cranks up exports to fuel hungry China

by This email address is being protected from spam bots, you need Javascript enabled to view it on Monday, 17 December 2007

RISING CONSUMPTION: China aims to meet robust demand growth as it starts up new refineries. (Getty Images)

Saudi Arabia has agreed to boost crude exports to China for 2008 to a record 720,000 barrels per day (bpd), 38% higher than the estimated 2007 level, Beijing-based trading sources close to the deal said on Monday.

The agreed 2008 volume, including purchases by China's state refiner Sinopec Corporation and PetroChina and equivalent to about 10% of China's total crude demand, aims to meet robust demand growth in the world's second-largest oil user as it starts up new refineries, the sources said.

The finalised deal is a fresh sign that Beijing is keen to foster energy ties with the world's top oil exporter to feed the world's fastest growing major economy, keeping the kingdom as its top oil supplier.

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"It's an increase of 10 million tonnes from this year," said one of the sources. In the first 10 months of this year, China imported about 520,000 bpd of Saudi oil, official customs data showed.

Sinopec alone had asked for a 30% increase in its Saudi oil imports for next year, a trading source told Reuters last month.

Sinopec, Asia's top refiner, is set to start a new 160,000 bpd refinery in Fujian province on the southeast coast in which state-run Saudi Aramco owns a 25% stake. It is the kingdom's first refinery investment in China.

The Chinese oil giant is also expected to start up a 200,000 bpd oil plant in east China's Shandong province, a refinery designed to process the high-sulphur Saudi crude, industry officials have said.

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