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MOSCOW (MRC) -- The Shanghai
International Energy Exchange (INE) is considering using oil storage sites in
Singapore owned by PetroChina Co as a delivery point for its low-sulphur fuel
oil futures contract, reproted Reuters
with reference to two sources with direct knowledge of the
matter.
The INE's move would be the first time a Chinese futures contract
would be deliverable outside of China and could boost liquidity for the
contract, as well as help to influence pricing for shipping
fuel.
Low-sulphur fuel oil (LSFO) is required as ship fuel to meet new
maritime emissions regulations that went into effect this year. Singapore is the
world's biggest ship-fueling port.
The INE posted a notice on its website
seeking market feedback on allowing LSFO futures contract buyers to take
deliveries outside China, but did not give a location or a start date for the
change.
However, Singapore could be used as a delivery point for the LSFO
contract before the end of the year, the two sources said.
"The new plan
gives traders, especially those large bunker fuel players in Singapore, greater
flexibility to take deliveries as they see more economic and convenient, versus
say Zhoushan (in China)," said one of the sources.
PetroChina
International, a unit of PetroChina, was Singapore's top marine fuel supplier in
2019. The company owns a 25% stake in Singapore's Universal Terminal oil storage
site at Jurong Island in the island city-state's southwest.
An INE
spokesman declined to comment on the matter. PetroChina and Singapore's Maritime
Port Authority did not immediately respond to requests for comment.
The
INE's yuan-denominated LSFO contract has traded 4.9 million lots through October
since it started up in June, or about 320 million barrels, the exchange
said.
The INE and China aim to grow the contract, for fuel oil with a
sulphur content of 0.5%, into an Asian benchmark for the ship fuel. The current
benchmarks are for cargoes sold in Singapore.
As MRC informed before,
state-owned PetroChina plans to spend about Yuan 10 billion (USD1.49 billion)
annually in the next five years for low carbon emission transitions as part of
the company"s effort to meet Beijing"s call for carbon neutrality by 2060,
according to the statment of Wei Fang, Assistant Secretary to the Board &
Head of Investor Relations, during the company"s Q3 result briefing. PetroChina,
China"s top integrated giant, had produced 4.43 million boe/d of oil and gas in
January-September. Wei said the company targets to achieve near zero emission by
2050 and is currently drafting the new green and low carbon development plan in
line with PetroChina"s 14th Five-Year Plan for 2021-25.
We remind that
PetroChina has nearly doubled the amount of Russian crude being processed at its
refinery in Dalian, the company's biggest, since January 2018, as a new supply
agreement had come into effect. The Dalian Petrochemical Corp, located in the
northeast port city of Dalian, was expected to process 13 million tonnes, or
260,000 bpd of Russian pipeline crude in 2018, up by about 85 to 90 percent from
the previous year's level. Dalian has the capacity to process about 410,000 bpd
of crude. The increase follows an agreement worked out between the Russian and
Chinese governments under which Russia's top oil producer Rosneft was to supply
30 million tonnes of ESPO Blend crude to PetroChina in 2018, or about 600,000
bpd. That would have represented an increase of 50 percent over 2017
volumes.
Ethylene and propylene are feedstocks for producing polyethylene
(PE) and polypropylene (PP).
According to MRC's ScanPlast report,
Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine
months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE)
shipments increased. At the same time, PP shipments to the Russian market
reached 880,130 tonnes in the nine months of 2020 (calculated using the formula:
production minus exports plus imports, excluding producers' inventories as of 1
January, 2020). Supply increased exclusively of PP random
copolymer.
PetroChina Company Limited, is a Chinese oil and gas company
and is the listed arm of state-owned China National Petroleum Corporation,
headquartered in Dongcheng District, Beijing. It is China"s biggest oil
producer. |
