* 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 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
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]