Business | Oil & Gas
Sinopec increases sour crude use to counter rising costs
Sour and acidic crudes will account for one-third of Sinopec's refinery throughput this year, as the company looks for ways to minimise the impact of record oil prices on its bottom line, a senior executive said yesterday.
- Reuters
- Published: 00:53 March 6, 2008
Beijing: Sour and acidic crudes will account for one-third of Sinopec's refinery throughput this year, as the company looks for ways to minimise the impact of record oil prices on its bottom line, a senior executive said yesterday.
Asia's top refiner will process about 54 million tonnes of the cheaper but more technically challenging oil this year, vice-president Cao Xianghong said on the sidelines of China's annual parliament session.
"Sinopec will continue to increase capacity capable of processing sulphur crude, which accounts for an increasing percentage of world supply," he added.
The refining giant is set to raise crude imports from the world's largest producer, Saudi Arabia, by nearly 40 per cent, and that from the fourth-largest exporter, Iran, by a third, traders have told Reuters. Oil from both suppliers are sour, or of high sulphur content.
Oil that is both acidic and sour could come in at more than $20 a barrel cheaper than more easily processed crudes.
This is a key difference for Chinese firms struggling to limit losses as global crude prices race to record levels, while Beijing is reluctant to raise state-set product prices because of concerns about inflation.
Chinese firms have been adding refining capacity with billions of dollars of investment at PetroChina's Dalian refinery, and at Sinopec's Fujian and Qingdao plants to process sour crude.
The government yesterday ruled out increases in gas, power and oil product prices in the near future, despite repeating a long-standing promise to reform the system used to set them.
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