China issues 9.75 million mt of oil export quotas, first lot in 2015
Source: www.chinamining.org Citation: Platts Date: January 16, 2015
China this week issued the first round of oil product export quotas for 2015, with volumes totaling 9.75 million mt, industry sources said Wednesday, January 14.
This is significantly more than the roughly 8 million mt of quotas that were awarded in the first quarter of last year.
State-owned companies seek export quotas for some oil products from the government based on their requirements and can also request to have unused volumes from the quota of a particular oil product converted to another product.
Quotas are given out approximately every quarter and unused volumes can be rolled over to the following quarter.
The latest quotas were approved by the Ministry of Commerce and General Administration of Customs late last month, according to sources.
GASOIL QUOTA DROPS
Reflecting a slight improvement in domestic gasoil demand and continued robust domestic production of gasoline and jet fuel/kerosene, the quota for gasoil was the lowest of the three main transport fuels, at 1.36 million mt -- 28.4% lower than the quota awarded in Q1 last year.
This suggests the pace of gasoil exports may not pick up significantly from the fourth quarter of last year, when outflows over October and November averaged 290,000 mt/month. Data for December will be released next week.
The total gasoline export quota of 2.68 million mt was up 22.4% from the first batch last year while jet/kerosene volumes soared 59.4% over the same period to 5.61 million mt.
The surge in jet fuel/kerosene quotas likely reflects expectations that the domestic market will continue to be oversupplied, largely because output by refineries is growing at nearly 20% year on year while demand is rising by roughly 13%.
China National Petroleum Corp. and Sinopec were each awarded total oil product quotas of 4.8 million mt while China National Oil Corp. received 150,000 mt.
Sinopec only received 350,000 mt of gasoil quota in this round, versus the nearly 1 million mt awarded to CNPC.
This is surprising given that Sinopec`s trading arm Unipec is responsible for the bulk of China`s gasoil exports.
A source close to the matter said that export economics for gasoil are not that favorable so it is unlikely that Chinaoil, CNPC`s trading arm, will utilize all its gasoil export quotas.
GASOLINE EXPORTS MORE ATTRACTIVE
CNPC has received the right to export 2.06 million mt of gasoline, while Sinopec has received an export quota of 600,000 mt.
Export-oriented refinery Dalian West Pacific Petrochemical Corp., which is majority held by CNPC, has received a quota to export 700,000 mt of gasoline, 700,000 mt for jet/kerosene, 200,000 mt for gasoil and 100,000 mt for naphtha.
A source at Wepec noted that it is now more profitable to export gasoline than gasoil, mainly because the export price of gasoline is higher than current domestic prices, but the reverse is true for gasoil.
The refinery expects to export slightly more oil products in the current quarter than in Q4 last year.
This month, it will likely export 100,000 mt of gasoline, 108,000 mt of jet fuel and 40,000 mt of gasoil.
CNOOC, which only started exporting from its 240,000 b/d Huizhou refinery in southern Guangdong province in the second half of last year, received the go-ahead to export 20,000 mt of gasoline, 30,000 mt of gasoil and 100,000 mt of jet/kerosene.
The quotas this year cover 20 refineries.
Besides Huizhou, CNPC`s eight refineries are unchanged from last year while Sinopec has only awarded quotas to 11 refineries instead of 12 -- its 280,000 b/d Fujian joint venture refinery with Saudi Aramco and ExxonMobil is no longer on the list of facilities awarded export quotas.
Fujian was awarded 90,000 mt of jet/kerosene export quota last year but did not utilize any volumes.
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