Chinese refiners eye Australia as new gasoline export market
Print Edition
CHINESE refiners are setting their eyes on Australia as a new destination for gasoline exports, as they crank up production of the motor fuel to meet rising domestic demand, industry sources said.
Investments by refiners to produce cleaner fuels as part of a national drive to curb domestic vehicle emissions has meant some are now able to meet stringent Australian specifications, opening up a new and potentially growing market.
State-owned PetroChina sold a rare gasoline cargo which is compatible with Australian specifications to Chevron Corp last month, a source close to the matter said.
“They are most likely shipping it to Australia as otherwise there is no point paying up the premium for the special grade,” said the source, who declined to be named as he was not authorized to speak to the media.
It was not clear how much Chevron paid for the cargo, but traders said it was sold at a high premium.
PetroChina, China’s top gasoline exporter, is currently able to produce a maximum of about 30,000 tons a month of gasoline that is able to meet Australian specifications, the source said, equivalent to about one medium-sized tanker load.
China’s West Pacific Petrochemical Corp, or WEPEC, will be able to produce Australian-grade gasoline from May once it starts a new gasoline-making continuous catalytic reformer unit, a second source close to the matter said.
Top Chinese refiner Sinopec Corp is also able to produce gasoline meeting Australian standards, a third source said, but it has yet to export to Australia.
Some Sinopec refineries are already producing fuel with a low 10 parts-per-million (ppm) sulphur for domestic use, ahead of plans to adopt this as standard in China by 2018, the source said.
Australia has more stringent specifications for fuel than other countries in Asia, requiring a lower sulphur content than many countries and lower reid vapor pressure which measures fuel volatility, traders said.
The country is set to boost gasoline imports as super-sized Asian refineries have made the local industry uncompetitive. BP plans to close its 102,000-barrel-per-day Bulwer refinery in May.
Australia imported about 380,000 tons of gasoline in January, its highest level since December 2011, latest data showed.
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