June 13, 2018 / 7:05 AM / 10 months ago

China's Hengli buys Brazilian oil ahead of refinery start-up -sources

SINGAPORE/BEIJING, June 13 (Reuters) - Chinese chemical producer Hengli Group has bought its first crude oil cargo from Brazil ahead of the start-up of a new refinery in the fourth quarter, two sources with knowledge of the matter said on Wednesday.

The 400,000 barrels-per-day (bpd) refinery in the northeastern port city of Dalian will be one of the five largest refineries in China and a major crude oil buyer. The plant is configured to process medium and heavy crude grades from Saudi Arabia as well as Brazilian oil.

To prepare for trial runs at the plant scheduled for October, the company has bought 1 million barrels of spot Marlim crude from Petrobras that arrived in China at the end of May, one of the sources said.

Both sources declined to be identified as they were not authorised to speak with media. Private company Hengli said it does not comment on spot deals.

Reuters reported last month that Hengli would receive its first Saudi crude, 2 million barrels of Arab Medium, in July, with plans to lift Arab heavy crude later.

The Ministry of Commerce recently gave Hengli permission to import 5 million tonnes (36.5 million barrels) of crude oil this year, one of the sources said. The ministry declined to comment.

Tuesday also marked the official opening of Hengli’s joint-venture trading office with Chinese state oil firm Sinochem Corp in Singapore.

Hengli OilChem, 80 percent owned by Hengli and 20 percent by Sinochem, will procure crude, sell products and petrochemicals and conduct third-party trading, the company said.

Reporting by Florence Tan and Chen Aizhu Additional reporting by Meng Meng and Seng Li Peng Editing by Joseph Radford

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