* China’s oil demand to grow faster as economy recovers
* China refiners agree to buy 1.04 mbpd Saudi oil for 2010
* Few refining capacities to be added in 2010
(adds details, other supply pacts)
By Chen Aizhu and Judy Hua
BEIJING/SINGAPORE, Nov 20 (Reuters) - Chinese state oil firms have agreed to raise 2010 crude imports from Saudi Arabia by about 12 percent from this year to top one million barrels a day, traders said, as demand in the world’s No.2 oil user is poised to recover more.
Growth is set to rise from under 10 percent seen this year, but still much more modest versus heady growths in the previous few years, as fewer refining capacities will be added in 2010 and as China stays as a net exporter of gasoline and diesel.
“The contract volume was finalised and everything is set. The (Saudi) supplies are likely to reach 1 million bpd if economic pace allows,” said a trader familiar with the term deal between the world’s top exporter and number-two consumer.
Oil duopoly Sinopec Corp (0386.HK) and PetroChina (0857.HK) have agreed to take about a combined 1.04 million barrels per day (bpd) crude from state-run Saudi Aramco, with Sinopec taking up more than 80 percent of the total, traders said.
The 2010 amount includes about 200,000 bpd to Fujian Refining & PetroChemical Co Ltd (FREP) in the southeast coast, which is 25 percent owned by state-run Saudi Aramco and is expected to run at top rates after start-up earlier this year.
The Riyadh- Beijing tie is likely to strengthen further as Aramco looks closer to invest in a second Chinese refinery, the 200,000-bpd plant in eastern port of Qingdao. [ID:nPEK283424]
The Kingdom now makes up 20 percent of China’s total crude imports, Saudi’s third-largest customer after U.S. and Japan.
By the end of this year, China would have added approximately 800,000 bpd refining capacities at four plants, but that pace will slow next year with possibly only one major new plant to start on line.
The agreed target of above 1 million bpd comes after Wang Tianpu, president of top refiner Sinopec Corp (0386.HK), told Reuters last week China’s refined fuel consumption would likely grow at 8 percent next year versus this year’s 3 percent.
It will mark a significant increase of about a quarter above actual supplies from Saudi Arabia in the first nine months of this year as reported by Chinese customs, as a result of the Organisation of the Petroleum Exporting Countries production cuts. [O/CHINA1]
While locking in a 12 percent increase in Saudi oil, Chinese oil firms are also set to secure next year’s supplies with other leading exporters in the Middle East and Africa.
Imports from Iran, the world’s fifth largest exporter and China’s No.3 supplier, will at least maintain the current level of around 400,000 bpd, the Sinopec’s president said last week.
Actual imports from Iran were a quarter above that contract level at nearly 500,000 bpd in the first nine months this year as the sanction-bound Islamic republic resorted to boost sales in the spot market.
“We have to secure other supplies as the OPEC cuts may affect grades that our plants really need,” said a Sinopec trader, adding Saudi had cut mostly heavier grades this year, forcing Chinese refiners to seek alternative grades from Africa.
Sinopec was set to renew a deal with Libya for next year to lift some 200,000-bpd crude, a volume tripling early 2009 levels as the state refiner sought to broaden supply sources, traders have said. [ID:nPEK304955]