Sinopec is filling new storage capacity in central China as the pace of U.S. crude exports to China is quickening. At least 12 very large crude carriers (VLCCs) are on subjects to load up to 25.1mn bl, or more than 835,000 b/d, of crude at the U.S. Gulf coast for China in September.

That is up from an estimated six tankers expected to load this month with an estimated 12.2mn bl, or almost 400,000 b/d, for the same destination, according to shipping fixture reports.

The U.S. exported at least 13.82mn bl, or roughly 445,000 b/d, of crude to China in July, according to preliminary vessel tracking data. This reflects a roughly 32% decrease from the 657,000 b/d in June flows to China cited by the U.S. Census Bureau in its latest available monthly statistics. U.S. crude exports to China hit a record-high in May at 1.26mn b/d.

Two more VLCCs are on subjects to begin loading at the U.S. Gulf coast in late August for either Singapore or China.

Now Sinopec (a key buyer of U.S. crude) has picked up the pace of low-sulphur crude storage injections at a new facility in the central province of Henan to supply its nearby Luoyang refinery.

The facility is part of Sinopec’s infrastructure investment programme, which includes expanding its Luoyang refinery by 40,000 b/d to 200,000 b/d and connecting the refinery to a 360,000 b/d crude pipeline from Rizhao port in Shandong province. The company is planning to expand Luoyang storage capacity by an additional 5mn bl by mid-2021.

Six of the 18 tankers scheduled to load for China between now and 30 September list Sinopec’s trading arm, Unipec, as the charterer.

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20th August 2020