PetroChina to retool new plant to avoid Sudan oil
- Current plant suits mostly acidic, sweet oil like Sudanese
- Revamp allows plant to process higher-sulphur grades
- Now at feasibility stage, upgrade takes several years
- Sudan is now China's No.6 oil supplier
PetroChina will accelerate an upgrade to a new, southern China refinery so that it can avoid processing oil from Sudan, after Washington said the firm's New York-listed unit should stay clear of Sudanese oil, company sources said on Tuesday.
The United States had imposed economic sanctions on Sudan since 1997, and former President George W. Bush imposed new ones in 2007 while seeking international support for an international arms embargo to end what he said was genocide in Sudan's Darfur region.
Reuters reported in early July that the U.S. government had told PetroChina, Asia's largest oil and gas producer, not to process crude Sudanese crude at the company's the new plant, despite the fact that CNPC, parent of PetroChina, is the largest foreign oil producer in the African state.
The refinery in the southern Guangxi region was designed mostly to handle the type of crude oil from Sudan, which is now China's sixth-largest crude supplier, with daily exports of about 269,000 barrels per day in the first six months of the year.
"The previous plan was to think about upgrading and revamping the Qinzhou refinery one or two years after its startup," said one company official.
"Now we are doing feasibility studies to add refining units to allow the plant to process crude other than Sudan oil."
PetroChina's new 200,000 barrel-per-day Qinzhou refinery, in the southwestern region of Guangxi, was scheduled to start commercial operations from late this month, after test runs at its main crude unit about a month ago.
A second PetroChina official said the U.S. restriction is one of the reasons for accelerating the upgrade works, with the poor economic benefit of the Sudanese crude being another.
"Sudanese crude is not cheap to refine," the source said.
For either reason, PetroChina has shifted to bringing in crude other than from Sudan, such as from within the Asia Pacific region and also West Africa's Angola.
The latter became the top supplier to China in the first half of the year.
The first official said PetroChina will add eight refining units including desulphuring and hydrotreating facilities, noting the programme would take at least two to three years to complete.
(Editing by Ken Wills)
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