Sinochem delays trial runs at new Quangzhou refinery

Sinochem Group, China’s fourth-largest oil and gas company, has delayed the start up of its USD4.8 billion refinery on the southeast coast of China due to construction delays, a source said. Trial operations were supposed to begin in June.
The new refinery, based in the port city of Quanzhou, has the capacity to process 12 million metric tons of crude oil a year, or 240,000 barrels a day, and it will mainly produce high-quality gasoline, kerosene and diesel fuel.
Sinochem said in a statement that it purchased its first crude cargo for the refinery, which would ship in late September and arrive in early November. The crude was purchased from Angola, which primarily sells sweet crude.
In 2008, Sinochem signed a preliminary agreement to purchase sour crude from Kuwait and Saudi Arabia for the proposed refinery. Sour crude is typically cheaper than sweet crude because it contains more impurities. However, this makes sour crude more difficult and costly to refine.
The Quanzhou refinery will only process sweet crude during trial operations as a way to minimize damage to the refinery, the person added.
Sinochem is the largest chemicals company in China by production, but ranks a distant fourth in the oil and gas sector.
(August 1, 2013)