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Sinopec to stop buying Iran condensate in Q3

Beijing, June 9, 2012

The Tianjin refinery, owned by China's Sinopec Corp, will stop buying condensate from Iran's South Pars field from July through September partly because of a planned major plant overhaul, an industry official said.

China, Iran's largest oil client, and other Asian buyers like India, Japan and South Korea have cut oil imports from Tehran by about a fifth from year-ago levels, as they prepare for US sanctions to come into effect.

They are also struggling to find ways around a European Union measure, effective in about three weeks, that prevents EU insurers from covering shipments that carry Iranian oil.

Tianjin Petrochemical Corp, a unit of state refiner Sinopec Corp, plans to shut down its 300,000 barrels per day (bpd) crude processing facilities and a one million tonne per year (tpy) ethylene complex from mid-August until the end of September.

The shutdown is now scheduled about two weeks earlier than a previous plan. The official said the plant would stop handling the condensate before the plant's closure because of hot July weather.

"We will be under whole-plant maintenance from mid-August till the end of September. For July, it is due to an environmental factor as the South Pars oil will be difficult to handle in hot summer weather," said the official who declined to be named as he is not authorised to speak to journalists.

The plant last bought the Iranian super-light crude oil for June arrival, the second month of imports this year after Sinopec resumed purchases of South Pars condensate following a halt in the first quarter because of contract disputes.

The refinery, in the northern port city of Tianjin, near Beijing, retooled an idled crude unit into a condensate splitter in early 2011 to process Iranian condensate.

Parent company Sinopec Corp lined up with Iran its first annual deal of the crude-like fuel - used to make petrochemicals - last year with a volume of at least 24 million barrels.

A few other Sinopec plants - Zhenhai, Guangzhou and Maoming - also process the South Pars condensate, which industry officials said contains a high level of foul-smelling sulfide.

Sinopec, also Asia's largest refiner, accounts for more than 90 percent of China's total Iranian oil imports.

China's imports of Iranian oil in the first four months were about 356,000 bpd, down 31 percent from a year ago, largely due to reductions made for the first quarter amid contract disputes that were resolved in late March.-Reuters

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