Sinopec runs more Mideast crude as Russia cuts supply

Sinopec Corp's refinery in Beijing starts operating at near full rates in August, some 30 per cent above year-ago levels, and is processing more Middle East crude after its Russian supply dried up, a company official said yesterday.

The newly expanded Sinopec unit stopped receiving Russian crude oil moved by rail via the northern Chinese region of Inner Mongolia since late last year, said the official.

"No more Russian oil. We are taking in oil from Oman, Kuwait and other high-sulphur grades instead," the official said.

Traders earlier said that Russia's crude shipment via the Inner Mongolian point of Erlian started to dry up this year, compensated by rail supply from a second border point, Manzhouli, in the country's northeastern border.

Total Russian crude exports, including a small portion of seaborne shipment, were down 6.7 per cent in the first half of 2007 versus a year ago, despite a 11.2 per cent increase in China's total crude imports, customs figures showed.

Sinopec's Yanshan plant used to process some 100,000 tonnes of Russian crude monthly in early 2006, roughly 15 per cent of its throughput.

The refinery now has a refining capacity of nearly 220,000 barrels per day (bpd), after it brought on line a new 160,000 bpd crude unit at the end of 2006 and mothballed an ageing facility.

Sinopec started a new pipe-line in June that links a crude terminal in Tianjin port with the plant situated in the Beijing suburb, allowing the refinery to process more imported seaborne oil to replace Russian crude, said the official.

Russia, which said in Feb-ruary it hoped to send as much as 15 million tonnes (300,000 bpd) of crude by rail to China this year, may miss the target again, if it fails to accelerate its supply in the second half from the estimated 258,000-bpd seen in the first half, said a Sinopec trader.