MOSCOW (MRC) -- China National Offshore Oil Corporation Ltd., or CNOOC, has booked two diesel shipments in late October, totalling about 50,000 tonnes, for early November delivery into south China, a rare purchase spurred by a strong domestic diesel market, reported Reuters with reference to several trading sources.
China has been a net diesel exporter in recent years but a reduction in domestic refinery throughput since June has tightened supplies and led to a rally in wholesale prices of the main transportation and industrial fuel.
The government's clampdown on light cycle oil, a blending component for diesel, by imposing a hefty tax on imports also cut into supplies.
"Very strong domestic diesel prices have created a window to bring in imported diesel," said one source.
A widespread power curb as well as soaring natural gas prices have also lent support to diesel, as some industrial and commercial consumers shifted to standalone diesel generators and truck fleets switched to more diesel use from natural gas.
As MRC wrote before, CNOOC targets to produce 545 million-555 million barrels of oil equivalent, or 1.49 million-1.52 million boe/d, of oil and gas in 2021, up about 4.5% from its estimated production of 528 million boe in 2020, on the back of contribution from its 19 new projects, including Buzzard oil field phase II.
We remind that CNOOC Dongfang, a subsidiary of CNOOC, halted production at its propylene plant in Hainan province on March 2 for a schedule turnaround. It was expected that the maintenance at this plant with a capacity of 150,000 mt/year of propylene to continue until mid-April 2021.
Propylene is the main feedstock for the production of polypropylene (PP).
According to MRC's ScanPlast report, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.
CNOOC is China's third largest national oil company after CNPC and Sinopec. The company was founded in 1982. The headquarters is located in Beijing. The company is engaged in the production, processing and marketing of oil and natural gas offshore China. The Chinese government owns 70% of the company's shares.