News Code : 43569

Petrotahlil :Saudi Aramco has shipped an Arab Light crude cargo in a rare move from its leased storage in Okinawa, Japan, to a PetroChina refinery in central Hebei province arriving Friday, sources familiar with the matter told Platts.

The 136,000 mt Arab Light crude cargo on the Suezmax tanker Glorycrown will be delivered to PetroChina's Huabei Petrochemical refinery, a port source said. The Glorycrown, is about to enter the Tianjin port in the Bohai Bay having left Okinawa in Japan's southwest October 8, according to Platts trade flow software cFlow.

Saudi Aramco's spot crude sale from the Okinawa storage was concluded before attacks on its oil facilities on September 14, a source familiar with the matter said.

Saudi Aramco in early September raised its official selling price for Arab Light crude for loading in October and bound for Asia by 60 cents/b to a premium of $2.30/b against the monthly average of Platts Oman/Dubai assessments.

Huabei Petrochemical started up 10 million mt/year (200,000 b/d) of crude processing capacity around May, after adding a new 5 million mt/year crude distillation unit at its expanded refinery complex.

The refinery, which had previously been processing crudes mainly from the domestic Huabei and Jidong oil fields, has started taking imported crudes in recent years after being connected with the Tianjin port, and has increased imports further since the upgrade.

The new 5 million mt/year CDU is configured to process crude with a sulfur content as high as 2.75%, mainly from the Middle East.

RARE SPOT SALES

It was Saudi Aramco's second spot crude shipment from the Okinawa storage this year after having shipped another crude cargo on the Suezmax Jag Lakshya in March, the source familiar with the matter said. The Jag Lakshya shipped a cargo to Quanzhou in Fujian in southern China from the Okinawa terminal, according to cFlow.

China's crude oil imports from Saudi Arabia surged 88% year on year to 7.79 million mt (1.84 million b/d) in August, the second-highest on record, according data released by China's General Administration of Customs.

The all-time high of 1.89 million b/d was in June, GAC data showed.

By expanding its customer portfolio in China, crude imports from Saudi Arabia surged 52% year on year to 1.58 million b/d in January-August, making it the top supplier and lifting its market share to 16% from 12% a year earlier.

Saudi Aramco's crude shipments from the Okinawa terminal have been rare in recent years as a result of Saudi Arabia's commitment to the OPEC/non-OPEC production cut deal, the source added.

The production accord, which OPEC signed with Russia and nine other non-OPEC countries in December, commits the 24-country coalition to 1.2 million b/d in supply cuts through March 2020.

Saudi Aramco leases 8.18 million barrels of storage capacity at Okinawa for commercial purposes in exchange for supplying Japan as a priority in the event of an emergency.

The current agreement with Saudi Aramco under a scheme known as "Joint Crude Storage by Producing Countries," under which Tokyo pays for storing Saudi Arabian oil at leased storage tanks in Okinawa, is due for renewal this year.

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