China’s Unipec, the trading arm of Asia’s largest refiner Sinopec, is planning its third very large crude carrier (VLCC) shipment of diesel from China to Europe or West Africa, two people familiar with the matter said on Wednesday.
The diesel cargo will be shipped from Sinopec’s refinery in the northern Chinese port of Tianjin on the newly built ‘New Eminence’, which can carry about 310,000 tonnes of fuel, the people said. They requested anonymity because they were not authorised to speak with media.
The New Eminence will load diesel from Tianjin, as well as Singapore, in May, the people said, following usual industry practice to complete loads in second ports where necessary. A buyer has not yet been found, one person said.
The plan is another sign of China flexing its muscles in overseas markets after years of building refining capacity and as a refined product glut builds in Asia. Another Chinese state-owned energy giant, CNPC, on Tuesday said it shipped its first gasoline cargo to the Americas.
This third cargo also comes as Unipec expands its reach beyond Asia as it looks for new markets to sell its higher-grade fuel.
Sinopec did not respond to an emailed request seeking comment on the matter.
The first Unipec VLCC cargo that shipped late last year from Tianjin – and Taiwan – was sold to buyers in West Africa, the Amsterdam-Rotterdam-Antwerp region and New York Harbour.
The second VLCC of diesel, the ‘Maran Aphrodite’, will load diesel from Tianjin and Singapore this month, and could either head to West Africa or Europe depending on economics. Unipec is also yet to secure a buyer for this cargo, people familiar with the matter said.
All cargoes are diesel with 10 parts per million (ppm) sulphur, which would meet Europe’s summer specifications, the people with knowledge of the matter said.
Chinese refineries are maximising production of 10ppm sulphur diesel to meet new domestic fuel quality standards and more cargoes could be shipped to Europe, which typically has more stringent fuel standards than in Asia, traders have said.
China’s stocks of refined products reached a record 21.55 million tonnes, half of which is diesel, at the end of February, official Xinhua data showed.