China's Rongsheng Expands to Canada, Taps Suncor for Crude Supply
(Reuters) — China's Rongsheng Petrochemical, a major independent refiner, has opened an office in Canada to buy Canadian crude and made its first purchase from local producer Suncor Energy, trade sources said.
Rongsheng, China's largest independent refiner with capacity of 40 million metric tons a year, or 800,000 barrels a day, has become a regular buyer of the heavy sour Canadian crude since the newly-expanded Trans-Mountain pipeline started operations last May.
More Canadian crude is expected to flow into Asia this year, as U.S. President Donald Trump threatens to impose a 10% import tariff on its oil and gas.
Rongsheng's first purchase since opening the new office in the western city of Calgary is for June-arrival crude cargo to China, the sources said.
The company recently started buying Canadian crude on a free-on-board (FOB) basis, while past purchases were mostly on a delivered at place (DAP) basis, Wang Jie, its Calgary-based general representative for Americas procurement and trading, told Reuters.
An FOB contract normally allows buyers to re-sell cargoes, affording more flexibility to redirect them, depending on market conditions.
Rongsheng also buys Canadian crude from suppliers such as Cenovus Energy CVE.TO, Canadian Natural Resources, ConocoPhillips, BP and Shell, Wang said.
Wang, who founded and chaired PetroChina International Canada Trading, an arm of state oil giant China National Petroleum Corp (CNPC), joined Rongsheng in January, his LinkedIn profile shows.
He was previously at Singapore-based Essence Energy.
"The company has always attached importance to the global talent layout and continues to optimize team configuration according to the needs of business development," Rongsheng said in an email to Reuters.
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