rongsheng refinery 2019 supplier

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)

Abu Dhabi, UAE – November 12, 2019: The Abu Dhabi National Oil Company (ADNOC) announced, today, it has signed a broad Framework Agreement with China’s Rongsheng Petrochemical Co., Ltd. (Rongsheng) to explore domestic and international growth opportunities which will support the delivery of its 2030 smart growth strategy.

The agreement will see both companies explore opportunities in the sale of refined products from ADNOC to Rongsheng, downstream investment opportunities in both China and the United Arab Emirates, and the supply and delivery of liquified natural gas (LNG) to Rongsheng.

The agreement was signed by His Excellency Dr. Sultan Al Jaber, UAE Minister of State and ADNOC Group CEO, and Li Shuirong, Chairman of Rongsheng Group.

H.E. Dr. Al Jaber said: “This Framework Agreement builds on the existing crude oil supply relationship between ADNOC and Rongsheng, which we are keen to enhance. The agreement covers domestic and international growth opportunities across a range of sectors, which have the potential to open new markets for our growing portfolio of products and attract investment to support our downstream and gas expansion plans.

Under the terms of the Framework Agreement, ADNOC and Rongsheng will explore opportunities for increasing the volume and variety of refined products sales to Rongsheng as well as ADNOC’s active participation as Rongsheng’s strategic partner in refinery and petrochemical opportunities, including an investment in Rongsheng’s downstream complex. In return Rongsheng will also explore potential investments in ADNOC’s downstream industrial ecosystem in Ruwais, including the proposed Gasoline Aromatics Plant (GAP) and the potential for ADNOC to supply and deliver liquified natural gas (LNG) for utilization by Rongsheng within its production complexes in China.

Shuirong said: “This Framework Agreement is a key milestone in Rongsheng Petrochemical’s strategic international expansion. ADNOC is an important trading partner, and we are confident of the win-win benefits of this partnership, particularly in realizing opportunities in the downstream space in Asia.

“The strategic cooperation with ADNOC will ensure that our ZPC project, which will have a refining capacity of up to 1 million barrels per day (mbpd) of crude, has adequate supplies of feedstock. Our valued partnership will enable Rongsheng Petrochemical to continue its expansion into the international oil market and we are confident Rongsheng Petrochemical will achieve enhanced market share and recognition in the global marketplace.”

Rongsheng Petrochemical Co., Ltd. is one of the leading companies in China’s petrochemical and textile industry. In recent years, Rongsheng has been committed to developing both vertically and horizontally across the value chain, investing massively in multiple high-value oil and gas projects. Amongst them, Zhejiang Petroleum & Chemical Co., Ltd. (ZPC), in which Rongsheng has a controlling interest, is a 40 million tons per annum mega integrated refining and chemical project. Once operational, ZPC will be one of the largest-scale plants in the world.

Textile giants Rongsheng and Hengli have shaken up China"s cozy, state-dominated oil market this year with the addition of close to 1mn b/d of new crude distillation capacity and vast, integrated downstream complexes. Petrochemical products, rather than conventional road fuels, are the driving force for this new breed of private sector refiner. And more are on their way.

Tom: And today we are discussing the advent of petrochemical refineries in China, refineries that have been built to produce mainly petrochemical feedstocks. Just a bit of background here, these two big new private sector firms, Rongsheng and Hengli, have each opened massive, shiny new 400,000 b/d refineries in China this year. Hengli at Changxing in Northeast Dalian and Rongsheng at Zhoushan in Zhejiang Province on the East coast. For those unfamiliar with Chinese geography, Dalian is up by China"s land border with North Korea and Zhoushan is an island across the Hangzhou Bay from Shanghai. And the opening of these two massive new refineries by chemical companies is shaking up China"s downstream market. But China is a net exporter of the core refinery products, gasoline, diesel, and jet. So, building refineries doesn"t sound like a purely commercial decision. Is it political? What"s behind it? How will it affect the makeup of China"s petrochemical product imports?

Chuck: And clearly, the driver here for Rongsheng and Hengli, who as Tom mentioned, are chemical companies, they are the world"s largest producers of purified terephthalic acid, known as PTA, which is the main precursor to make polyester, polyester for clothing and PET bottles. And each of them were importing massive amounts of paraxylene, paraxylene being the main raw material to make PTA. And paraxylene comes from the refining of oil. And really the alternate value for paraxylene or its precursors would be to blend into gasoline to increase octane. So, when looking to take a step upstream in terms of reverse or vertical integration, they"ve quickly found themselves not just becoming paraxylene producers, but in fact becoming refiners of crude to begin with, which of course, is quite complex and it involves all kinds of co-products and byproducts. And as many know, the refining of oil, the primary driver there, as Tom has mentioned, is to produce motor fuels. So, we"re reversing this where the petrochemicals become the strategic product and we look to optimize or maybe even limit the amount of motor fuels produced.

Chuck: And margins, of course, as well because no one wants to shut down their unit just to accommodate the new Chinese production. And what remains to be seen is global operating rates for these PX units will be reduced to maybe unsustainable levels. And as margins come down, they"ll be down for everyone, but the most efficient suppliers or producers will be the ones that survive. And in the case of Hengli and Rongsheng, low feedstock costs, if you"re driving down the cost of paraxylene, you take the benefit on the polyester side because now you have very competitive or very low-priced feedstock.

Tom: That"s a really interesting point actually. Looking at it from a refining economics point of view, if you were trying to diversify your revenue stream, for example, you probably wouldn"t want to increase your gasoline production. And gasoline margins in Europe are barely breaking even, they"re about $4 a barrel. In China, gasoline crack spreads are actually negative. So, fine, they"re self-sufficient in the paraxylene they need for weaving, but are they just... the refiners themselves, Hengli and Changxing, are they now just soaking up losses from the sales of their transport fuels? I think they may be initially, but they"re not just giving their gasoline away, obviously, these refineries were conceived as viable commercial concerns. Hengli anticipates profits, I think, of around 12 billion Yuan per year from its Changxing refinery giving a payback period on that investment of around five years. And each company, interestingly enough, has a distinct marketing strategy for their transport fuel.

Rongsheng is trying to build itself into a retail brand around Shanghai and the Zhejiang area. And Hengli is trying to muscle into the wholesale market on a national level, so it"s gonna be selling products across China. And in that respect, as we were discussing earlier, in fact, Rongsheng appears to have an advantage because where it"s located on the East Coast of China, that region is net short still of transport fuels, but Hengli in the Northeast, that"s a very competitive refining environment. It"s a latecomer to an already pretty saturated market: PetroChina, a state-owned oil giant, is a huge refiner up in Northeast China with its own oil fields, so a ready-made source of low-cost crude. And it"s also very close to the independent sector refining hub in Shandong Province, which is the largest concentration of refineries in China. So, I think there are definite challenges for them on the road fuel front, even if it sounds like they"re going to be pretty competitively placed further downstream in the paraxylene market.

Tom: Well, that"s one of the peculiarities of the Chinese market. As private sector companies, neither Rongsheng nor Hengli are allowed currently to export transport fuels. That"s a legacy concern of the Chinese government to ensure energy self-sufficiency downstream to make sure there"s adequate supply on the domestic market of those fuels. So, that is a real impediment for them. And when they ramp up production of gasoline, diesel, and jet, they are driving down domestic prices and they are essentially forcing product into the seaborne market produced by other refineries. So, in that respect, the emergence of Hengli in Northeast China on PetroChina"s doorstep has created a huge new sense of competition for PetroChina in particular. And I think certainly when you look at their recent financial data, it"s quite clear that they are struggling to adapt to the new environment in which it"s essentially export or die, because these new, massive refineries are crushing margins inside China.

Chuck: And going back specifically to the Hengli and Rongsheng projects, it"s interesting to note, again, going to an order of magnitude or perspective, Hengli is producing or has capacity to produce 4.5 million tons of paraxylene. And in phase one, Rongsheng will have capacity to produce 4 million tons. And I know those are just large numbers, but again, bear in mind that last year, global demand was 43.5 million. So, effectively, these two plants, they could account for 20% of global demand. Just these two projects themselves to give you an idea of just how massive they are and how impactful they can be. Impactful or disruptive, it remains to be seen.

Tom: A sign it doesn"t do things by halves. Although that said, one of the interesting things they have done is essentially halved their transport fuel yields. So, where in a conventional refinery, your combined output of gasoline, diesel, and jet, those core products, might be in the region of 80%, when you look at these new refineries, they"ve really cut that back down to 40% or 50%. And there are new petrochemical refineries springing up, and it"ll be very interesting to see how disruptive those are to the petrochemical market. But in the conventional refining market, they are, I think under pressure to do even more to reduce their exposure to already weakened gasoline and diesel markets. I mean, Shenghong — this new textile company who"s starting up another massive new conventional refinery designed to produce petrochemical products in 2021, I think — they"ve managed to reduce that combined yield to around 30%. They"ve reduced that from an original blueprint.

Chuck: It"s remarkable, but just a note of caution, there have been other petrochemical and refinery projects built recently in Saudi Arabia and in Malaysia, in particular, with established engineering and established chemical and refining companies. And they"ve had trouble meeting the targeted dates for startup and it"s one thing to be mechanically complete, it"s another thing to be operationally complete. But both Hengli and Rongsheng have amazed me at how fast they were able to complete these projects. And by all reports so far, they are producing very, very effectively, but it does remain to be seen why these particular projects are able to run whereas the Aramco projects in Malaysia and in Rabigh in Saudi Arabia have had much greater problems.

Tom: It sounds like in terms of their paraxylene production, they are going to be among the most competitive in the world. They have these strategies to cope with oversupplied markets and refined fuels, but there is certainly an element of political support which has enabled them to get ahead of the pack, I guess. And suddenly in China, Prime Minister Li Keqiang visited the Hengli plant shortly after it came on stream in July, and Zhejiang, the local government there is a staunch backer of Rongsheng"s project. And Zhoushan is the site of a national government initiative creating oil trading and logistics hub. Beijing wants Zhoushan to overtake Singapore as a bunkering location and it"s one of the INE crude futures exchanges, registered storage location. So, both of these locations in China do enjoy a lot of political support, and there are benefits to that which I think do allow them to whittle down the lead times for these mega projects.

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]

Meanwhile, though, enticed by discounted prices Chinese independents in Shandong province have continued to scoop up sanctioned Iranian oil, especially as their domestic refining margins have thinned due to tight regulatory scrutiny. In fact, throughout the period in which Iran has been under nuclear-related sanctions, Chinese teapots have been a key outlet for Iranian oil, which they reportedly unload from reflagged vessels representing themselves as selling oil from Oman and Malaysia.[38] China Concord Petroleum Company (CCPC), a Chinese logistics firm, remained a pivotal player in the supply of sanctioned oil from Iran, even after it was blacklisted by Washington in 2019.[39] Although Chinese state refiners shun Iranian oil, at least publicly, because of US sanctions, private refiners have never stopped buying Iranian crude.[40] And in recent months, teapots have been at the forefront of the Chinese surge in crude oil imports from Iran.[41]

Refinery based crude oil-to-chemicals (COTC) technology involves configuring a refinery to produce maximum chemicals instead of traditional transportation fuels. COTC complexes elevate petrochemical production to an unprecedented refinery scale. Due to the huge scale as well as the amount of target chemicals each COTC complex produces, COTC technology is expected to be disruptive, in terms of abrupt supply increase and price fluctuation, to the global petrochemical industry when each project starts. COTC is happening now with three refinery-PX projects, Hengli (Dalian, China), Zhejiang Phase 1(Zhejiang China), and Hengyi (Brunei) starting in 2019.

Hengli announced on May 17, 2019 that its COTC refinery-PX complex had achieved full line trial production. The complex is expected to produce 4.34 million tons of PX (paraxylene) per year, in addition to 3.9 million tons of other chemicals. The total chemical conversion per barrel of oil is estimated to be 42%. Hengli’s configuraton is mainly based on hydrocracking of diesel, gas oil, and vacuum residue with technologies licensed from Axens. PEP Report 303, published in December 2018, analyzed Hengli Petrochemical’s refinery-PX complex, provided PEP’s independent analysis of the process configuration and production economics.

Zhejiang Petroleum and Chemical (ZPC) Co.’s COTC refinery-PX project has two phases. Phase 1 is close to completion with several units in the intial trial operation. During the recent visit by S&P Global on May 23, 2019 to Rongsheng, the majority share holder of ZPC, said that full operation is expected in the third quarter of 2019. When completed, Phase 1 is expected to produce 4.0 million tons of PX, 1.5 million tons of benzene, 1.4 million tons of ethylene, and other downstream petrochemicals. The total chemical conversion per barrel of oil is about 45%.

ZPC’s configuration is mainly based on diesel hydrocracking with technology licensed from Chevron and gasoil hydrocracking with technology licensed from UOP. For vacuum residue upgradation, ZPC uses Delayed Coking (open art) and Residue Desulfurization followed by Residue Fluid Catalytic Cracking (RFCC) licensed from UOP. The Phase 2 project construction has also started, and when completed it will have a similar scale to Phase 1. However, the Phase 2 refinery configuration will be further enhanced by UOP to produce more mixed feeds to support two word-scale steam crackers as compared to one cracker for Phase 1. The total chemical conversion has been announced to increase to 50%, up from 45% in Phase 1. The number of downstream petrochemical units is also expected to differ from Phase 1.

The objective of this report (PEP 303A) is to analyze ZPC’s Phase 1 refinery-PX complex. Although Zhejiang Phase 1 project, as announced, includes a steam cracker and fifteen downstream petrochemical units, PEP 303A analysis will draw a boundary before steam cracker to focus on PX production economics to be compared to that of Hengli’s complex.

Section 1 introduces various crude oil-to-chemicals (COTC) approaches including directly feeding a light crude to steam cracker and configuring a refinery to produce maximum chemicals. In this section, we have discussed the merits and impacts of each approach, and why COTC is different from the conventional state-of-art refinery-petrochemical integration. We have elaborated the potential impact and implications of COTC on global petrochemical production.

Section 2 summarizes the overall PX production economics of Zhejiang Phase 1 refinery-PX complex. The economics are evaluated under a wide range of oil price scenarios and compared with Hengli’s project.

Saudi Aramco today signed three Memoranda of Understanding (MoUs) aimed at expanding its downstream presence in the Zhejiang province, one of the most developed regions in China. The company aims to acquire a 9% stake in Zhejiang Petrochemical’s 800,000 barrels per day integrated refinery and petrochemical complex, located in the city of Zhoushan.

The first agreement was signed with the Zhoushan government to acquire its 9% stake in the project. The second agreement was signed with Rongsheng Petrochemical, Juhua Group, and Tongkun Group, who are the other shareholders of Zhejiang Petrochemical. Saudi Aramco’s involvement in the project will come with a long-term crude supply agreement and the ability to utilize Zhejiang Petrochemical’s large crude oil storage facility to serve its customers in the Asian region.

Phase I of the project will include a newly built 400,000 barrels per day refinery with a 1.4 mmtpa ethylene cracker unit, and a 5.2 mmtpa Aromatics unit. Phase II will see a 400,000 barrels per day refinery expansion, which will include deeper chemical integration than Phase I.

Zhejiang Petrochemical operates the Dayushan Island refinery, which is located in Zhejiang, China. It is an integrated refinery owned by Zhejiang Rongsheng Holding Group, Tongkun Group, Jihua Group, and others. The refinery, which started operations in 2019, has an NCI of 12.06.

Information on the refinery is sourced from GlobalData’s refinery database that provides detailed information on all active and upcoming, crude oil refineries and heavy oil upgraders globally. Not all companies mentioned in the article may be currently existing due to their merger or acquisition or business closure.

Abu Dhabi National Oil Company (ADNOC) has signed a broad framework agreement with China’s Rongsheng Petrochemical to explore domestic and international growth opportunities in support of ADNOC’s 2030 growth strategy.

The companies will examine opportunities in the sale of refined products from ADNOC to Rongsheng, downstream investment opportunities in both China and the United Arab Emirates (UAE) and the supply of liquified natural gas (LNG) to Rongsheng.

Under the terms of the deal, the companies will also study chances to increasing the volume and variety of refined product sales to Rongsheng as well as ADNOC’s participation as the China firm’s strategic partner in refinery and petrochemical projects. This could include an investment in Rongsheng’s downstream complex.

In return, Rongsheng will also look at investing in ADNOC’s downstream industrial ecosystem in Ruwais, UAE, including a proposed gasoline-to-aromatics plant as well as reviewing the potential for ADNOC to supply LNG to Rongsheng for use within its own complexes in China.

Rongsheng’s chairman Li Shuirong added that the cooperation will ensure that its project, which will have a refining capacity of up to 1 million bbl/day of crude oil, has adequate supplies of feedstock.

The Chinese group holds a 51% stake in Zhejiang Petroleum & Chemical Company (ZPC), which is currently building a major refining and petrochemical complex in Zhoushan, Zhejiang province, to comprise two oil refineries and two 1.4 million t/y ethylene plants.  The first phase is due for completion in 2020. Saudi Aramco agreed in February 2019 to take over the Zhoushan government’s 9% share in the project.

Were the extra barrels needed to satisfy unusually strong refinery demand? A desire to stockpile supply for later consumption? Or perhaps add more cushion to strategic reserves?

Image: The agreement was signed by His Excellency Dr. Sultan Al Jaber, UAE Minister of State and ADNOC Group CEO, and Li Shuirong, Chairman of Rongsheng Group. Photo: courtesy of Abu Dhabi National Oil Company.

The Abu Dhabi National Oil Company (ADNOC) has entered into a framework agreement with China-based Rongsheng Petrochemical to look out for domestic and international expansion opportunities.

The deal will see ADNOC and Rongsheng explore opportunities in the sales of refined products from ADNOC to Rongsheng, downstream investment opportunities in both China and the UAE, and the supply and delivery of LNG to Rongsheng.

Under the terms of the agreement, both the companies will look out for opportunities to expand the volume and range of refined products sales to Rongsheng in addition to ADNOC’s participation as Rongsheng’s strategic partner in refinery and petrochemical opportunities, including funding in Rongsheng’s downstream complex.

On the other hand, the China-based company will also explore possible investments in ADNOC’s downstream industrial ecosystem in Ruwais, including the proposed Gasoline Aromatics Plant, GAP, and the possibility for ADNOC to supply and deliver LNG for utilisation by Rongsheng within its production factories in China.

Rongsheng Group chairman Li Shuirong said: “The strategic cooperation with ADNOC will ensure that our ZPC project, which will have a refining capacity of up to 1 million barrels per day (mbpd) of crude, has adequate supplies of feedstock.

“Our valued partnership will enable Rongsheng Petrochemical to continue its expansion into the international oil market and we are confident Rongsheng Petrochemical will achieve enhanced market share and recognition in the global marketplace.”

"Chinese independent refineries, including two mega projects Hengli and Rongsheng, stepped up purchases before year-end to maximize the utilization of crude import quotas," said Chen Jiyao, oil consultant at FGE.

Hengli Petrochemical and Zhejiang Petrochemical Corp, controlled by Zhejiang Rongsheng Holdings, each added 400,000 bpd in processing capacity, mainly focused on petrochemical output. That boosted China"s crude oil imports notably from Saudi Arabia, helping the kingdom reclaim its title from Russia as China"s top crude supplier.

Tuesday"s data also showed China"s refined fuel exports in 2019 rose 14.1% from a year earlier to a record 66.85 million tonnes as refinery throughput outpaced domestic fuel demand growth. December exports were 6.79 million tonnes.

By Florence Tan, Chen Aizhu and Rania El Gamal SINGAPORE/BEIJING/DUBAI (Reuters) - Saudi Arabia is set to expand its market share in China this year for the first time since 2012, with demand stirred up by new Chinese refiners pushing the kingdom back into contention with Russia as top supplier to the world"s largest oil buyer. Saudi Arabia, the biggest global oil exporter, has been surpassed by Russia as top crude supplier to China the past two years as private "teapot" refiners and a new pipeline drove up demand for Russian oil. Now fresh demand from new refineries starting up in 2019 could increase China"s Saudi oil imports by between 300,000 barrels per day (bpd) and 700,000 bpd, nudging the OPEC kingpin back towards the top, analysts say. Saudi Aramco said last week it will sign five crude supply agreements that will take its 2019 contract totals with Chinese buyers to 1.67 million bpd. "With the recent crude oil supply agreements and potential increase of refinery capacity, the Saudis could overtake the Russians and reclaim (the) crown as the biggest crude exporter to China," Rystad Energy analyst Paola Rodriguez-Masiu said. Saudi Arabia has already gained ground this year. China imported 1.04 million bpd of Saudi crude in the first 10 months of 2018, China customs data showed. This is equivalent to 11.5 percent of total Chinese imports, up from 11 percent in 2017, Reuters calculations showed. Saudi"s market share in China could jump to nearly 17 percent next year, if buyers requested full contractual volumes, analysts from Rystad Energy and Refinitiv said, while growth in Russian oil supply to China could slow. China imported 1.39 million bpd of Russian crude in January-October this year, about 15 percent of total Chinese imports, customs data showed. Russia had a 14 percent share at 1.2 million bpd in 2017. "We expect Chinese imports of Russian crude to remain at a similar rate in 2019 as a large share of these Russian barrels are imported via pipeline," Refinitiv analyst Mark Tay said. Graphic: China"s top crude oil suppliers by market share - https://tmsnrt.rs/2PKcVZF NEW CUSTOMERS The biggest boost to Saudi exports to China comes from contracts inked with new refineries starting up this year and next, owned by companies other than state oil giants Sinopec or PetroChina. The contracts include 130,000 bpd to Dalian Hengli Petrochemical and up to 170,000 bpd to Zhejiang Petrochemical Corp, each of which has a 400,000-bpd refinery. Saudi Aramco has also agreed to increase Sinochem Corp"s supplies, which will be processed at its Quanzhou and Hongrun refineries. Sinopec, PetroChina and China National Offshore Oil Corp have all kept their term Saudi volumes for next year unchanged. Beijing-based consultancy SIA Energy expects Saudi crude imports to rise by just 300,000 bpd in 2019, raising its market share to 13.7 percent, but leaving it behind Russia. "We expect lower Saudi crude demand from Hengli and Rongsheng as it is unlikely for them to run their refineries at full rate in 2019," analyst Seng Yick Tee said. Zhejiang Petrochemical is majority-owned by Rongsheng Holdings. Still, a source familiar with Aramco"s export plans said there is tremendous appetite from China"s independents, and that it needed to be more aggressive in its marketing strategy. The state oil company did move more swiftly to seal the most recent deals than it used to in the past, industry sources said. Aramco"s first deal with Hengli was to supply 20 million barrels of crude, about 55,000 bpd, in 2018, said a senior source with direct knowledge of the deal. "Hengli executed the 2018 deal nicely, which helped build trust," he said. Hengli is designed to process 90 percent Saudi crude, a mix of Arab Medium and Arab Heavy, while the remaining 10 percent is Brazilian Marlim crude. Rongsheng"s plant is identical to Hengli, the industry sources said. The sources spoke on condition of anonymity. Aramco is also supplying PetroChina"s refinery in China"s southwestern Yunnan province with about 4 million barrels a month of crude via a pipeline from Myanmar between July and November, Eikon data showed, although sources said talks for Saudi Arabia to acquire a stake in the refinery have stalled. Saudi Aramco"s Chief Executive Amin Nasser said on Monday the company will push to expand its market share in China and is still looking for new refining deals there despite OPEC"s likely limits on output next year. Graphic: China crude oil imports by country - https://tmsnrt.rs/2PPwEaA MAY CUT OIL EXPORTS TO U.S. Saudi Aramco will supply up to 70 percent of the oil required at its 300,000-bpd joint venture refinery in Malaysia with Petronas. Between China and Malaysia alone, Saudi Arabia will have to increase exports to Asia by more than 500,000 bpd next year. This comes as the Organization of the Petroleum Exporting Countries (OPEC) is discussing production cuts of as much as 1.4 million bpd for next year to prop up oil prices. Between balancing global supplies and increasing market in Asia, Aramco may decide to "forgo market share in other markets like the United States, where the surge in domestic production will make it difficult for the Saudis to retain market share anyway," Rystad"s Rodriguez-Masiu said. Saudi"s oil shipments to the United States have risen recently to above 1 mln bpd, but U.S. output is also increasing, said the source familiar with Saudi Aramco"s export plans. "You need to lessen the inventories in the U.S.," the source said, adding that Aramco will likely divert oil supply from the United States to Asia to meet rising demand there. A Chinese oil executive said: "China is where the demand growth is. The Saudis are very wise to capture this market." Graphic: U.S. crude oil imports from Saudi Arabia - https://tmsnrt.rs/2PNG723 (Reporting by Florence Tan in SINGAPORE, Chen Aizhu in BEIJING and Rania El Gamal in DUBAI; Editing by Tom Hogue)