March 12, 2025 [Oil Price]- Shandong Yulong Petrochemical, the newest refiner in China, is set to begin trial runs at a 200,000-barrels per day crude processing unit later this month, traders familiar with the facility’s plans told Reuters on Monday, in what could be a boost to Chinese crude oil imports in the coming months.
Shandong Yulong Petrochemical started up its first crude processing unit of 200,000 bpd in September 2024. This unit has kept crude processing rates at 90% of capacity since November.
Now the refiner, whose refining and chemicals complex is worth $20 billion, is set to begin trial runs at the second crude unit of another 200,000 bpd at the end of March, according to the trading sources who spoke to Reuters.
The new refining unit could raise crude oil imports in the world’s top crude buyer after recent slumps due to tepid domestic fuel demand. But more fuel production could also depress already weak refining margins in China and the region.
Faced with a hectic reorganization of the crude trade following the U.S. sanctions on Russia, Shandong Yulong Petrochemical has reportedly boosted purchases of West African and Brazilian crude in recent weeks.
The Chinese refiner last month bought four shipments of crude from Angola and Nigeria a trade source familiar with the deals told Reuters in February. Shandong Yulong Petrochemical booked a cargo each of Angola’s Dalia, Plutonio, and Girassol crude and one cargo of Nigeria’s Nemba, all for delivery in March.
The Chinese refiner has also bought two shipments of crude from Brazil for delivery in April, according to the source.
At the same time, China’s crude oil imports over the first two months of the year fell by 5% compared to the same period of 2024 as the parting round of sanctions that the Biden administration imposed on Russian energy affected international flows.
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