SINGAPORE: Zhejiang Petrochemical Corp, a major Chinese refiner backed by Saudi Aramco, is shutting a 200,000-barrel-per-day unit, bringing forward maintenance in response to the Middle East conflict's impact on crude supply, it said on Tuesday.
Separately, another Chinese refiner backed by Aramco, Fujian Refining and Petrochemical Co, or FREP, shut its 80,000 bpd crude unit - its smallest - for an unspecified amount of time, two industry sources familiar with the matter said.
The U.S.-Israeli war with Iran has cut off nearly all shipping in the Strait of Hormuz, a conduit for 20% of global oil supplies. The supply squeeze has pushed up international oil prices and is expected to spur other refiners to curb runs, industry sources said.
The world's biggest oil importer, China sources roughly half its crude from the Middle East.
ZPC IS ONE OF CHINA'S LARGEST REFINERIES
ZPC's month-long overhaul in March will cut throughput by 20%, a company representative told Reuters. Designed to process 800,000 barrels per day, the refinery is one of China's largest, and ran above its nameplate capacity in February, sources said.
"We had earlier planned the overhaul around March and April, and now we're bringing this forward under the current circumstances," the ZPC official said.
Fujian Refining and Petrochemical Co, a joint venture between the Fujian provincial government, state refining giant Sinopec, U.S. major ExxonMobil and Aramco, sourced about 180,000 bpd of crude last year via the Strait of Hormuz, Kpler shipping data showed, nearly 95% of its seaborne crude intake.
Sinopec, the plant's operator, and Aramco, which has a 25% stake, did not immediately respond to requests for comment.
CUTS OF UP TO 20% ARE POSSIBLE, ANALYST SAYS
Some Chinese refineries reliant on Middle East term supplies may trim crude runs by as much as 20%, Energy Aspects analyst Sun Jianan wrote in a note on Monday.
"Chinese refineries are likely to undertake precautionary run cuts as Middle East shipping flows come to a standstill," Sun wrote.
Privately-controlled ZPC has a 20-year supply agreement with state-run Saudi Aramco for 480,000 bpd of crude and operates four 200,000-bpd crude units in Zhoushan in eastern China.
Aramco owns a 10% stake in Rongsheng Petrochemical , ZPC's largest stakeholder.
Apart from Saudi oil, which supplies 60% of its designed capacity, ZPC is one of China's biggest buyers of Canadian oil.
It also buys from Kuwait, Iraq and the United Arab Emirates, with the Middle East accounting for 75% to 80% of its total purchases, tanker tracker Vortexa estimates.
Unlike many Chinese independent refiners, ZPC has avoided supplies from Russia, Iran and Venezuela that are subject to Western sanctions, industry and trade sources have said.
Traders also told Reuters, however, that record loadings of Iranian crude and record imports of Russian of crude in February, together with robust government stockpiling, mean Chinese independent refiners have enough supply to weather near-term disruption.
Separately, another Chinese refiner backed by Aramco, Fujian Refining and Petrochemical Co, or FREP, shut its 80,000 bpd crude unit - its smallest - for an unspecified amount of time, two industry sources familiar with the matter said.
The U.S.-Israeli war with Iran has cut off nearly all shipping in the Strait of Hormuz, a conduit for 20% of global oil supplies. The supply squeeze has pushed up international oil prices and is expected to spur other refiners to curb runs, industry sources said.
The world's biggest oil importer, China sources roughly half its crude from the Middle East.
ZPC IS ONE OF CHINA'S LARGEST REFINERIES
ZPC's month-long overhaul in March will cut throughput by 20%, a company representative told Reuters. Designed to process 800,000 barrels per day, the refinery is one of China's largest, and ran above its nameplate capacity in February, sources said.
"We had earlier planned the overhaul around March and April, and now we're bringing this forward under the current circumstances," the ZPC official said.
Fujian Refining and Petrochemical Co, a joint venture between the Fujian provincial government, state refining giant Sinopec, U.S. major ExxonMobil and Aramco, sourced about 180,000 bpd of crude last year via the Strait of Hormuz, Kpler shipping data showed, nearly 95% of its seaborne crude intake.
Sinopec, the plant's operator, and Aramco, which has a 25% stake, did not immediately respond to requests for comment.
CUTS OF UP TO 20% ARE POSSIBLE, ANALYST SAYS
Some Chinese refineries reliant on Middle East term supplies may trim crude runs by as much as 20%, Energy Aspects analyst Sun Jianan wrote in a note on Monday.
"Chinese refineries are likely to undertake precautionary run cuts as Middle East shipping flows come to a standstill," Sun wrote.
Privately-controlled ZPC has a 20-year supply agreement with state-run Saudi Aramco for 480,000 bpd of crude and operates four 200,000-bpd crude units in Zhoushan in eastern China.
Aramco owns a 10% stake in Rongsheng Petrochemical , ZPC's largest stakeholder.
Apart from Saudi oil, which supplies 60% of its designed capacity, ZPC is one of China's biggest buyers of Canadian oil.
It also buys from Kuwait, Iraq and the United Arab Emirates, with the Middle East accounting for 75% to 80% of its total purchases, tanker tracker Vortexa estimates.
Unlike many Chinese independent refiners, ZPC has avoided supplies from Russia, Iran and Venezuela that are subject to Western sanctions, industry and trade sources have said.
Traders also told Reuters, however, that record loadings of Iranian crude and record imports of Russian of crude in February, together with robust government stockpiling, mean Chinese independent refiners have enough supply to weather near-term disruption.
