December 14, 2017 [Hellenic Shipping News] - China Sinopec Fuel Oil Sales Co Ltd, a wholly-owned subsidiary of state-owned Sinopec, has signed one year term contract with Saudi Aramco to buy LPG cargoes for delivery in 2018, a source close to the matter said Friday.
“The cargoes will comprise both propane and butane and are expected to start delivery in the first quarter of 2018,” the source said.
“The cargoes under the contract will be priced according to Saudi Aramco’s monthly CPs on an FOB basis, just like Saudi Aramco’s other term contracts,” the source added.
The total volume of the contract was not immediately known.
“This is Saudi Aramco’s second direct sale of LPG cargoes to China and Sinopec Fuel also has the right to recommend a monthly contract price to Saudi Aramco,” the source said.
Saudi Aramco signed its first term contract directly with a buyer in China, propane dehydrogenation plant operator Wanhua Chemical, in February 2016, and has subsequently renewed the annual term contract, S&P Global Platts reported earlier.
Saudi Aramco is the fourth biggest LPG supplier to China, mostly via international trading companies and Wanhau, sending 1.12 million mt of LPG to China in the first 10 months of this year.
Sinopec Fuel, whose core business used to be oil product trading, currently has no big LPG terminals and storage facilities in China.
“The company is expected to cooperate with other LPG import terminals or its sister companies which have LNG terminals and storage facilities for receiving the LPG cargoes,” the source said.
Unipec, another wholly-owned subsidiary of Sinopec, signed a long-term contract to buy propane from US refiner Phillips 66 in 2014, Platts reported earlier.
China’s LPG demand has seen significant growth in the past few years, attracting new suppliers to the market, sources said.
China’s LPG apparent demand had posted two digit growth every year since 2013, with volume seen at around 49.84 million mt in 2016, up 79% from 27.91 million mt in 2013, according to Platts calculations based on data from the General Administration of Customs and the National Bureau of Statistics.
—————————-
Learn how to unlock more key tank terminal data. Join the Free Webinar TankTerminals.com 2.0: Smart Business Decisions, Powered by Data. Date: February 7th, 2018.
