rongsheng zhoushan refinery quotation

SINGAPORE, Oct 14 (Reuters) - Rongsheng Petrochemical, the trading arm of Chinese private refiner Zhejiang Petrochemical, has bought at least 5 million barrels of crude for delivery in December and January next year in preparation for starting a new crude unit by year-end, five trade sources said on Wednesday.

Rongsheng bought at least 3.5 million barrels of Upper Zakum crude from the United Arab Emirates and 1.5 million barrels of al-Shaheen crude from Qatar via a tender that closed on Tuesday, the sources said.

Rongsheng’s purchase helped absorbed some of the unsold supplies from last month as the company did not purchase any spot crude in past two months, the sources said.

Zhejiang Petrochemical plans to start trial runs at one of two new crude distillation units (CDUs) in the second phase of its refinery-petrochemical complex in east China’s Zhoushan by the end of this year, a company official told Reuters. Each CDU has a capacity of 200,000 barrels per day (bpd).

Zhejiang Petrochemical started up the first phase of its complex which includes a 400,000-bpd refinery and a 1.2 million tonne-per-year ethylene plant at the end of 2019. (Reporting by Florence Tan and Chen Aizhu, editing by Louise Heavens and Christian Schmollinger)

* China’s Zhejiang Petrochemicals, which is owned by Rongsheng Group, has been awarded a quota to import 5 million tonnes of crude oil this year, a statement from the Zhoushan Bureau of Commerce in Zhejiang province said on Thursday.

ZPC, which operates China"s single-largest crude oil refinery based in eastern port city Zhoushan, in July became the first private refiner allowed to export refined fuel, but the size of its quota had not been determined.

"The export quotas will offer more flexible choices for the company in the fuel market ... and will allow the company to pursue bigger benefits," Rongsheng said in the statement.

The allotment to Norinco will go to the group"s subsidiary refinery, Huajin Petrochemical, based in northeast China"s Liaoning province, which aims to use the quota for diesel exports, one of the officials said.

Despite swelling domestic fuel inventories as a result of record refinery processing, Chinese refiners have capped overseas shipments so far this year as the coronavirus pandemic slashed global demand.

2021 marked the start of the central government’s latest effort to consolidate and tighten supervision over the refining sector and to cap China’s overall refining capacity.[14] Besides imposing a hefty tax on imports of blending fuels, Beijing has instituted stricter tax and environmental enforcement[15] measures including: performing refinery audits and inspections;[16] conducting investigations of alleged irregular activities such as tax evasion and illegal resale of crude oil imports;[17] and imposing tighter quotas for oil product exports as China’s decarbonization efforts advance.[18]

Yet, of the three most recent major additions to China’s greenfield refinery landscape, none are in Shandong province, home to a little over half the country’s independent refining capacity. Hengli’s Changxing integrated petrochemical complex is situated in Liaoning, Zhejiang’s (ZPC) Zhoushan facility in Zhejiang, and Shenghong’s Lianyungang plant in Jiangsu.[21]

As China’s independent oil refining hub, Shandong is the bellwether for the rationalization of the country’s refinery sector. Over the years, Shandong’s teapots benefited from favorable policies such as access to cheap land and support from a local government that grew reliant on the industry for jobs and contributions to economic growth.[22] For this reason, Shandong officials had resisted strictly implementing Beijing’s directives to cull teapot refiners and turned a blind eye to practices that ensured their survival.

In 2016, during the period of frenzied post-licensing crude oil importing by Chinese independents, Saudi Arabia began targeting teapots on the spot market, as did Kuwait. Iran also joined the fray, with the National Iranian Oil Company (NIOC) operating through an independent trader Trafigura to sell cargoes to Chinese independents.[27] Since then, the coming online of major new greenfield refineries such as Rongsheng ZPC and Hengli Changxing, and Shenghong, which are designed to operate using medium-sour crude, have led Middle East producers to pursue long-term supply contracts with private Chinese refiners. In 2021, the combined share of crude shipments from Saudi Arabia, UAE, Oman, and Kuwait to China’s independent refiners accounted for 32.5%, an increase of more than 8% over the previous year.[28] This is a trend that Beijing seems intent on supporting, as some bigger, more sophisticated private refiners whose business strategy aligns with President Xi’s vision have started to receive tax benefits or permissions to import larger volumes of crude directly from major producers such as Saudi Arabia.[29]

The shift in Saudi Aramco’s market strategy to focus on customer diversification has paid off in the form of valuable supply relationships with Chinese independents. And Aramco’s efforts to expand its presence in the Chinese refining market and lock in demand have dovetailed neatly with the development of China’s new greenfield refineries.[30] Over the past several years, Aramco has collaborated with both state-owned and independent refiners to develop integrated liquids-to-chemicals complexes in China. In 2018, following on the heels of an oil supply agreement, Aramco purchased a 9% stake in ZPC’s Zhoushan integrated refinery. In March of this year, Saudi Aramco and its joint venture partners, NORINCO Group and Panjin Sincen, made a final investment decision (FID) to develop a major liquids-to-chemicals facility in northeast China.[31] Also in March, Aramco and state-owned Sinopec agreed to conduct a feasibility study aimed at assessing capacity expansion of the Fujian Refining and Petrochemical Co. Ltd.’s integrated refining and chemical production complex.[32]

Zheng); Zheng January 20, 2021 Report, the Rongsheng No

Rongsheng acceptance ure/detail?plate=szse&orgId=9900015

Zhejiang Rongsheng Holding Group Co., Ltd. non-state-owned 61.46% 6,222,789,981 2,092,063,766 0 6,222,789,981

Explanation of the relationship or concerted action and Li Guoqing are nephews of Li Shuirong, Chairman of the Board of Directors of Zhejiang Rongsheng Holding Group Co., Ltd., and Xu

Zhejiang Rongsheng Holding Group Co., Ltd. 6,222,789,981 RMB ordinary shares 6,222,789,981

to Eligible Investors by 20 Rongsheng 14922 August 31, August 31, September interest. The

Rongsheng G2 0 2020 2020 2, 2024 interest shall be

19 Rongsheng G1 1,000,000,000 2 years 994,614,150.95 1,002,893,069.59 48,854,246.58 2,452,683.83 1,054,200,000.00

20 Rongsheng G1 1,000,000,000 4 years (2 + 2) 995,452,830.20 1,029,248,500.45 47,700,000.04 1,211,525.65 47,747,169.81 1,030,412,856.33

20 Rongsheng G2 1,000,000,000 995,405,660.39 1,011,504,472.60 47,834,246.60 1,172,688.86 47,994,339.62 1,012,517,068.44

project of Zhoushan Green Other Development and Reform Bureau for investment projects

State oil giant Saudi Aramco signed an agreement on Thursday to invest in a refinery-petrochemical project in eastern China, part of its strategy to expand in downstream operations globally.

The memorandum of understanding between the company and Zhejiang province included plans to invest in a new refinery and co-operate in crude oil supply, storage and trading, according to details released by the Zhoushan government after a signing ceremony in the city south of Shanghai.

Zhejiang Petrochemical, 51 percent owned by textile giant Zhejiang Rongsheng Holding Group, is building a 400,000-barrels-per-day refinery and associated petrochemical facilities that was expected to start operations by the end of this year.

Aramco also owns part of the Fujian refinery-petrochemical plant with Sinopec and Exxon Mobil Corp, and has plans to build a 300,000-bpd refinery with China’s Norinco. It is also in talks with PetroChina to invest in a refinery in Yunnan.

China"s greenfield Zhejiang Petrochemical will use a range of process technology from Honeywell UOP for the second phase of its integrated refining and petrochemical complex in Zhoushan, Zhejiang province, according to a document, quoting a senior Honeywell official, seen by S&P Global Platts Thursday.

Zhejiang Petrochemical was established in 2017 and is a joint venture between textile companies Rongsheng Holding (51%) and Tongkun Group (20%), as well as chemical company Juhua Group (20%). Saudi Arabia"s state-owned oil company Aramco on October 18, 2018, said it was taking a 9% stake in the refinery, with a source close to the project telling Platts that Aramco had agreed to supply around 5 million mt (36.65 million barrels) of crude to the plant in 2019.

With an overall project cost of Yuan 160 billion ($25.8 billion), Zhejiang Petrochemical plans to ultimately build up 40 million mt/year of crude processing capacity on Yushan Island of Zhoushan city in eastern China"s Zhejiang province.

Chinese private petrochemical group Zhejiang Rongsheng Holding has signed a framework agreement with state-run shipping conglomerate Cosco Shipping Group to form a strategic partnership.

11 sets of chemical equipment, including 1 million tons/year ethylene cracking unit, 100,000 tons/year EVA unit, 400,000 tons/year HDPE unit, 200,000 tons/year EO/EG unit, and 200,500 tons/year EO/EG unit. Annual PO/SM unit, 350,000 tons/year PP unit, 120,000 tons/year butadiene extraction unit, 100,000/30,000 tons/year MTBE unit/butene-1 unit, 500,000 tons/year pyrolysis gasoline Hydrogen unit, 350,000 tons/year aromatics extraction unit, 800,000 tons/year P2A unit; 2 sets of oil refining equipment, including newly built 3 million tons/year atmospheric distillation unit and 450,000 tons/year refinery dry gas Pre-refining device.

The second phase of the 40 million tons/year refining and chemical integration project of Zhejiang Petrochemical Co., Ltd. is located in Yushan Island, Daishan County, Zhoushan City, Zhejiang Province. The total investment is 82.93 billion yuan. It is planned to invest 20 billion yuan in 2020 and the total land area is 500,000 square meters. The construction period is 2020-2022.

On January 22, 2021, in order to promote the construction of the second phase of the 40 million tons/year refining and chemical integration project of Zhejiang Petrochemical Co., Ltd., a holding subsidiary of Rongsheng Petrochemical Co., Ltd., Zhejiang Petrochemical as a borrower and 10 banks The syndicate signed the "Syndicated Loan Contract", and the project syndicate agreed to provide the borrower with a medium- and long-term loan line equivalent to RMB 52.7 billion or equivalent foreign exchange.

The refinery area is located in the area west of the Longjiang estuary in the Dananhai Petrochemical Industrial Zone, Jieyang, Guangdong; the crude oil terminal reservoir is located in the Shibeishan area in the southeast of Huilai County; the crude oil terminal is located in the sea near the Shibeishan lighthouse in Jinghai Town; the refined oil terminal is located in the Longjiang River, the Dananhai The waters west of the estuary.

Hengli Petchem and Zhejiang Rongsheng"s new 400,000 bpd refinery each in Dalian and Zhoushan, respectively, are expected to come on stream in the last quarter of this year. In the same quarter, CNPC"s 100,000 bpd and Sinopec"s 200,000 bpd incremental capacity in Huabei and Zhanjiang, respectively, are also expected to become operational, they said.

In China, the biggest of these is Rongsheng Petrochemical Co.’s plant on Zhoushan island, near Ningbo. The 800,000 barrel-a-day operation opened in 2019 and will reach full capacity before year-end. An Indian Oil Corp.-led group is planning a gigantic 1.2 million barrels a day oil-to-chemicals complex on the country’s west coast. Saudi Aramco, as part of its strategy to invest downstream in Asia, has or plans to take a stake in both projects.

“It doesn’t make sense now to operate a standalone refinery or a standalone petrochemicals plant for that matter," said Sushant Gupta, research director for Asia Pacific refining at WoodMac. Smaller facilities will find the new environment challenging, while there’s also a risk of over-capacity, he said.

The big new projects combined with low oil prices will potentially lead to refinery closures in developed markets over 2021 and 2022, Goldman Sachs Group Inc. said in a note last month. Some 1.2 million barrels a day of Chinese independent refining capacity will shut down over the next few years, while simpler plants in Japan and Australia will also be stressed, according to Gupta.

There are still plenty of integrated refineries in the pipeline, however. The Zhoushan plant may be expanded to 1.2 million barrels a day and there are more facilities planned at Shenghong, Yantai and Caofeidian. China will add about 1.6 million barrels a day of integrated capacity by 2025, WoodMac said.

Saudi Aramco is reportedly set to sign an agreement to purchase a stake in a refinery and petrochemical project in eastern China. Aramco"s senior vice-president of downstream, Abdulaziz al-Judaimi, has been quoted in media reports as saying that the Saudi energy giant is set to invest in the Zhejiang project in eastern China.

The Zhejiang Petrochemical Company, 51 per cent owned by Chinese textile major Rongsheng Holding Group, plans to start its 400,000 barrels a day (b/d) refinery, which is integrated with a petrochemical plant in the eastern province of Zhejiang, in late 2018.

Last month, Aramco signed a long-term deal with Rongsheng to supply about 170,000 b/d crude oil for the project, to be located in the port city of Zhoushan.

Aramco also owns part of the Fujian integrated refinery and petrochemical complex with Sinopec and Exxon Mobil Corp, and has plans to build a 300,000 b/d refinery with China’s Norinco.