From Africa to Australia, Chinese refiners are exploring new markets to ship surplus oil products such as jet fuel and diesel, putting them on track to compete with global trading houses and refining centers such as Singapore.
The switch to being a growing exporter of fuel comes despiteChina recently becoming the world's largest net oil importer. The opening of more refineries to process oil has emerged just as the world's second-biggest economy shifts down a gear so there is less demand for some transport and industrial fuels, which are more sensitive to the pace of growth.
This has driven China's biggest refiner Sinopec Corp and its domestic rivals to look outside traditional markets, such as Vietnam and Hong Kong, to sell surplus cargoes, sources close to the matter said.
Chinese diesel exports could reach 3.7 million barrels a month by next year, traders said, more than double the average so far in 2013.
This sharp turnaround could mean refining margins in Asia are squeezed by the new supply, which could also make prices of fuel exports cheaper. The increased shipments come just as new refineries are also coming on stream in the Middle East next year and with higher U.S. exports.
China's refining capacity was close to 12 million barrels per day by the end of 2012 and is set to grow by about 3 million bpd between 2013 and 2015, according to industry officials and media, more than double India's capacity.
Overall fuel demand in China was about 9.79 million bpd last month, according to Reuters calculations based on preliminary government data.
Demand for gasoline and diesel is set to rise by 617,000 bpd and 718,000 bpd, respectively, over the next five years, according to estimates by JBC Energy.
China's economic growth target of 7.5 percent for 2013 would be the weakest in more than 20 years, slowing demand growth for diesel, used in factories and for heavy vehicles. Gasoline demand has held up better, supported by rapid growth in car ownership.
Sinopec is targeting new markets in Africa,Australia,Asia and Canada
Source: Reuters
