Trafigura extends credit to China teapots to boost crude sales -sources

viernes 5 de agosto de 2016 03:59 GYT

* Clinches deals with Shandong refiners Shouguang Luqing,
    * Crude oil came from Latin America
    * Deals seen as riskier, but profitable

    By Chen Aizhu and Meng Meng
    BEIJING, Aug 5 (Reuters) - Trafigura has extended the credit
period for two independent Chinese refiners to buy crude,
marking a more aggressive push by the global commodity trader to
feed the growing appetite of so-called "teapot" refiners to
import oil, sources said.
    Trafigura has sold at least 3 million barrels of Latin
American crude, worth around $125 million at current benchmark
prices, to teapots Shouguang Luqing Petrochemical Co Ltd and
Huifeng Petrochemical Group, according to three trading sources
with knowledge of the transactions.  
    Delivered in May and June, Trafigura allowed the buyers to
pay for the cargoes 90 days after loading, said these sources.  
    Normally suppliers offer a tighter 30 to 60 days to make
    Teapots, which have boosted their imports after Beijing
granted them import permits, are hungry to secure financing but
the rush to purchase by the relatively inexperienced buyers has
increased trading risks with cases when deals have soured.
    One trader with knowledge of the recent Trafigura deals said
that these type of deals should suit the Swiss trading house
given its extensive operations but other suppliers might not be
prepared to conduct similar trades.
    "We will look very closely at how these deals unfold,"
another source, a senior oil banker, said.
    A Trafigura spokeswoman declined to comment when asked to
confirm these deals.
    Under a "third-party processing" agreement, the Chinese
counterparts committed to supply Trafigura with refined fuel,
mostly gasoline, allowing the transactions to enjoy tax
exemptions for the crude inflows and refined fuel exports,
according to Chinese customs rules. 
    Under one of the deals, Trafigura sold 1 million barrels of
Venezuelan Merey crude to Shouguang Luqing, a
60,000-barrel-per-day refinery in eastern Shandong province, and
received a commitment for 50,000 tonnes of gasoline, according
to a Luqing procurement manager.
    Trafigura also sold to Huifeng Petrochemical, a 116,000-bpd
teapot refiner, 1 million barrels of Colombian Vasconia crude
and 1 million barrels of Argentinian Escalante, under the same
terms, according a Huifeng official. 
    Trafigura has emerged as one of the world's leading oil
trading companies. It was the first to sell Iranian oil to
teapots, selling part of a 2-million-barrel cargo on the Olympic
Target tanker to at least two refiners. 
    The first teapot crude import licences were only granted
last year and they have become a key driver behind the 14
percent rise in China's oil imports and its bulging fuel
    Chinaoil, trading arm of China's state-run PetroChina
, in July clinched a similar deal with Huifeng to
supply 200,000 barrels of crude on credit and offtaking 10,000
tonnes of gasoline, said a trader with direct knowledge of the

 (Additional reporting by Florence Tan in SINGAPORE; Editing by
Henning Gloystein and Christian Schmollinger)