World non-renewable energy discussion

So the interesting part here is that the Russians are getting hurt from the price caps. China & India are buying crude on a delivered basis. So, it cost more to ship oil from Western part of Russia than Pacific. As such, it does make more sense for Russia to keep delivering oil from its Pacific ports to Chinese port nearby while it finds new customers for Ural oil. Especially as it seems like the refined oil in Western part of Russia is having a harder time finding customers.

Other interesting part is to just see China's spot buying drop off with all this cheap Russian and Iranian oil. I'm sure they will find customers though. oil is a valuable commodity.
Also reading this, you get the feeling that China doesn't import all that much from Venezuela (to my surprise).

tphuang said:

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So the interesting part here is that the Russians are getting hurt from the price caps. China & India are buying crude on a delivered basis. So, it cost more to ship oil from Western part of Russia than Pacific. As such, it does make more sense for Russia to keep delivering oil from its Pacific ports to Chinese port nearby while it finds new customers for Ural oil. Especially as it seems like the refined oil in Western part of Russia is having a harder time finding customers.

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Other interesting part is to just see China's spot buying drop off with all this cheap Russian and Iranian oil. I'm sure they will find customers though. oil is a valuable commodity.
Also reading this, you get the feeling that China doesn't import all that much from Venezuela (to my surprise).

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Where is China's oil import data from? China surely doesn't list how much oil it imports from Iran or Venezuela, those deals all go through gray channels.

oil market gets more interesting. Looks like for Shandong refiners, the Russian Ural crude is now trading as a discount even to ESPO crude that they typically receive. Makes sense since their refineries have more experience with ESPO crude. That I assume is why Ural crude production is dropping.

Aside from that, the Iranians are having trouble selling their crude due to flood of cheap Russian crude entering the market.

They are bringing online the 2 largest LNG storage tanks in the world at 270k cubic meter of LNG. This is built around Zhuhai.
When completed, 5 of these tanks will be online by 2024 and able to process 7 million ton of LNG at year, equivalent to 10 bcm of natural gas.

CNOOC found a new oil field off Bohai, but don't get too excited.
100 million tons is not much compared to the overall 3.5 billion tons of proven reserves in China
more important, only 2000 barrels of crude a day is very little.

Sinopec building new refinery to move up in the petrochemical chain

Looks like the Shandong refineries are now importing fuel oil for refining from Malaysia and Russia due to lack of crude import quotas. The entire thing about crude import quota is weird. If they can keeping importing and make money, just let them do it. Also, this is due to issues from Venezuela.

tphuang said:

CNOOC found a new oil field off Bohai, but don't get too excited.
100 million tons is not much compared to the overall 3.5 billion tons of proven reserves in China

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more important, only 2000 barrels of crude a day is very little.

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This new oil field produces more natural gas than crude though. It has enough natural gas to supply Tianjian for 15 years.


渤中26-6油田位于渤海南部海域，距离天津市约170公里，平均水深22.1米。发现井渤中26-6-2井钻遇油气层累计超过320米，完钻井深4480米，测试平均日产油超270吨，平均日产气超32万立方米。

据了解，渤中26-6油田探明地质储量超1.3亿吨油当量，能够开采原油超2000万吨，提炼成汽油后可供10000辆小汽车正常行驶30年，同时可开采天然气超90亿立方米，能够满足天津市常住人口使用近15年，具有可观的社会与经济效益。

tphuang said:

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So the interesting part here is that the Russians are getting hurt from the price caps. China & India are buying crude on a delivered basis. So, it cost more to ship oil from Western part of Russia than Pacific. As such, it does make more sense for Russia to keep delivering oil from its Pacific ports to Chinese port nearby while it finds new customers for Ural oil. Especially as it seems like the refined oil in Western part of Russia is having a harder time finding customers.

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Other interesting part is to just see China's spot buying drop off with all this cheap Russian and Iranian oil. I'm sure they will find customers though. oil is a valuable commodity.
Also reading this, you get the feeling that China doesn't import all that much from Venezuela (to my surprise).

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Venezuela is now selling to the US.

interesting, huge export numbers for refined products in Jan/Feb

China exported 12.96 million tonnes of refined oil products in the first two months of the year, according to customs figures released on March 7. The preliminary data released this week doesn't provide a breakdown by product, but using BP's conversion factor of 8 barrels of products per metric tonne gives a figure of around 1.76 million barrels per day (bpd) of fuel exports in the first two months.

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I'm not convinced with this argument that greater domestic demand means less export. They can just import more oil from Russia & keep export at the same level. It's not like their refinery capacity is anywhere close to being fully realized.

This is the kind of export that Sinopec wants to get into

According to Sinopec, the project will include 12 facilities, including a 3 million TPA catalytic cracker, a 700,000 TPA gasoline hydrotreating unit, and a 100,000 TPA Epichlorohydrin unit. It is being constructed alongside Sinopec's Shijiazhuang refinery in the province of Hebei.

Cosmetics and higher-performance plastics will be made with one of this upgrade's key chemical products.

As part of a national goal to reach peak carbon emissions by 2030 and carbon neutrality by 2060, national energy companies like Sinopec have pledged multibillion-dollar investments in green sectors like renewable energy, carbon capture, and cleaner refining.

The upgrade project at SINOPEC's refinery in northern China will bring many benefits to the company. The $1.56 billion upgrade will modernize the facility and help improve its efficiency and productivity. By doing this, SINOPEC will be able to reduce production costs, increase profitability, and reduce environmental impacts

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Called moving up the value chain. There are some nervous chemical companies around the world right now. The cost advantage for Chinese petrochemical companies is going to be huge compared to European ones.

More things to consider from hydrocarbon industry.

Shale boom is over and we are likely at the peak of what America will be producing and the economics of shale fields are getting worse since the easily tappable projects are getting dry so they have to go to secondary locations which require higher prices to drill. Not great for profitability and other stuff. So, I think the era of low oil prices is over. What this means is the control of non-US oil will be more important going forward.

So, it's good that China has now normalized relations between Saudi Arabia and Iran. That's a good step forward.

What we are seeing is that China's shipborne import of Russian crude is hitting an all time high in March at 43 million barrels. When combined will pipeline oil, this will likely be a new high oil import from Russia. On the flip side, the discount is shrinking.
Also, PetroChina & Sinopec are both buying Urals, which is leading to over 11 million barrels of Ural import.

Also Indian competition is shrinking the discount on the ESPO crude imports.

China’s small independent refineries doubled their fuel oil imports for the month of February amid good refining margins and tight supply of the alternative feedstock bitumen blend. At the same time multiple sweet crude cargoes loaded from Russia’s North-western Arctic region are moving towards China’s independent refineries which are keen to embrace the discounted Russian crude.

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the independent refiners are celebrating big time

More on the expanded energy trade between China & Russia

Gazprom announced that in 2023, Gazprom’s daily natural gas exports to China via the Power of Siberia pipeline will set a new historical record. Since January 1, the company’s daily export volume has reached and exceeded the level required by the 2023 agreement.

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This is equivalent to about 1.7 million barrels per day. In addition, to meet growing demand in Asia, the company is developing the major Vostok oil project, where it intends to reach a production of 115 million tons per year, or about 2.3 million barrels per day, by 2033. The project will transport oil along the Northern Sea Route through Russia’s Arctic waters, reducing delivery time and costs.

Besides this oil project, CNPC and the Russian company Rosneft Oil signed an additional agreement on the purchase and sale of crude oil. According to the agreement, Russia will continue to supply 100 million tons of crude oil to China through the territory of Kazakhstan for 10 years. Meanwhile, as of January, CNPC imported over 300 million tons of crude oil and over 15 cubic meters of natural gas from Russia through the pipeline.

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From the look of this, China does have some pretty secure oil supply coming from Russia both via Artic shipping, over land through Kazakhstan pipeline (200k bpd for 10 years ) and also the ESPO pipeline ( up to 1.6million bpd by 2025)