Singapore — China's Sinopec is in discussions with government authorities and suppliers regarding its Iranian crude oil imports and is trying to make special arrangements on the flow in the coming weeks, an executive said during the company's third-quarter results briefing call on Wednesday.
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Asian refiners have until November 4 to wind down Iranian crude purchases, of which China is the single biggest buyer, with Sinopec absorbing around two-thirds of the country's imports from Iran.
Company Vice President Huang Wensheng on Wednesday said many Sinopec refineries were configured to process Iranian crude oil, which has a rich aromatics content for boosting refining margin, and the company has had term contracts with Iran for over two decades.
As the biggest refiner in the world by capacity and throughput, Sinopec bought around 20.44 million mt (410,000 b/d) of Iranian crude oil in 2017, accounting for 8.6% of its total crude throughput, according to filings with the US Securities and Exchange Commission.
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, S&P Global Platts' trade flow software cFlow showed on Wednesday.
Huang was confident about the company's feedstock security despite uncertainties on Iranian crude supplies. Sinopec relies on imports to meet 85% of its crude demand.
Sinopec's trading firm Unipec trades more than 300 million mt (2.2 billion barrels) of crude annually, and over 60% of the volumes are sent back to China, Huang said, adding that the trade volume and crude types were sufficient and diverse enough to accommodate supplies for its refineries.
The company usually adjusts its crude import plan on a monthly basis.
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.
(Updated to add details)
-- Oceana Zhou, firstname.lastname@example.org
-- Edited by Irene Tang, email@example.com