Sinopec’s Vice President Huang Wensheng said Wednesday that many of the company’s refineries are configured to process Iranian crude oil, which has a rich aromatics content, and that the company has had term contracts with Iran for over two decades.
The company is in discussions with government authorities and Iranian suppliers, “trying to make special arrangements on the flow in the coming weeks," S&P Global quoted Huang as saying.
China is Iran’s biggest oil customer. Beijing has pledged to maintain Iran oil imports despite US call on Chinese buyers to cut shipments from Iran to zero from November or face sanctions.
The company bought around 149.83 million barrels of Iranian crude oil in 2017, accounting for 8.6% of its total crude throughput.
Sinopec's refinery throughput rose 3% year on year to 4.92 million b/d in January-September, according to the company's Q3 report.
"Iranian crude has a high naphtha yield with high naphthenes and aromatics content, which makes them a good feedstock for refineries with continuous reformers and they have been popular among all Sinopec refineries," a source at Sinopec's Qilu refinery said previously.
Big users of Iranian crude under Sinopec include subsidiaries Zhenhai Petrochemical, Maoming Petrochemical, Qingdao Refining and Petrochemical and Qilu Petrochemical.
China's crude imports from Iran have likely peaked in August at 791,000 b/d, while volumes in October and November were expected at 580,000 b/d and 642,000 b/d, respectively.
Huang said Sinopec has executed its import plan for November but declined to give details on its loading plan for Iranian crude.
It takes about one-and-a-half months for a cargo to move from Iran to China.
Chinese ports of Dalian and Zhoushan are reportedly receiving stepped-up supplies of Iranian oil.
Tankers operated by National Iranian Tanker Company are shipping oil into storages, giving Iran the options to store the oil or sell to regional customers later.
Sinopec and China’s another top state-owned refiner, CNPC, have invested billions of dollars in Iran’s giant Yadavaran and North Azadegan oil fields and eye participating in further developments of the deposits.
CNPC is considering taking over Total’s stake in phase 11 of Iran’s South Pars gas field after the French company left the project in August.