China’s CNOOC in Talks to Buy 1 Million Mt/Year of LPG From 2015 for 5-10 Years

China National Offshore Oil Corporation is in talks with an unknown Western major to buy around 1 million mt/year of LPG, mainly propane, a company source said Wednesday, September 3.

CNOOC's petrochemical complex in Huizhou will use the imported LPG as feedstock once the second phase of expansion is completed in 2017, the source said.

The expansion project involves building 16 units including a 10 million mt/year crude distillation unit and a 1 million mt/year ethylene production complex with 13 downstream petrochemical units.

Once completed, the 12 million mt/year refinery's primary crude processing capacity will be raised to 22 million mt/year, and its ethylene output capacity will be doubled to 2 million mt/year, Platts reported earlier.

LPG TO BE SOLD TO PDH PLANTS

CNOOC was said to be holding talks with many domestic propane dehydrogenation or PDH plants for the imported LPG ahead of the startup of its own petrochemical complex.

The 600,000 mt/year Tianjin Bohai Chemical PDH plant, which started full operations in November 2013, has a term deal with Everglory to buy 1.584 million mt of propane from US' Targa Resources for delivery from late 2013 to 2019.

Shaoxing Sanyuan Petrochemical has propane supply contract, also for an unknown volume, for 2013-2015 with SK Chemical and Fujian Meide Petrochemical has a term deal for propane supplies over 2016-2020 with an unnamed supplier, industry sources said earlier.

"With more and more PDH plants starting operations in the next two years, China's demand for imported propane will also increase accordingly," the source said.

（platts.com  Edited by Topco)