Singapore — Saudi Aramco is targeting to supply 1.67 million b/d of crude oil to China in 2019 -- a volume that will help OPEC's leading producer return as China's top crude supplier. China will also become Saudi Arabia's single largest crude buyer. Receive daily email alerts, subscriber notes & personalize your experience. Aramco signed five new crude oil supply agreements with five Chinese customers in Shanghai in early November during the first China International Import Expo, which will help take the company's total 2019 term supply volume to 1.67 million b/d, Aramco said in a newsletter released on Wednesday. "The new supply contracts make it very likely that Saudi Aramco next year will become China's largest supplier, a position it held from 2006 until 2016," Aramco said in the newsletter. "In the fourth quarter of 2018, Saudi Aramco's crude exports to China are marking a new record of 1.6-1.7 million b/d. The new 2019 COSA [crude oil supply agreement] volumes will ensure that Saudi Aramco's crude sales to China stay at these levels, well ahead of all other major suppliers," the state-owned oil company said. Saudi Arabia's crude supply to China fell 0.2% year on year to an average of 1.03 million b/d in the first three quarters of 2018, data from China's General Administration of Customs showed. The highest year-to-date supply was recorded in February 2012 at 1.39 million b/d, GAC data showed. As the second largest crude supplier, Saudi Arabia's crude arrivals totaled at 924,552 b/d in September, 70% lower than the 1.66 million b/d from Russia, according to GAC data. The five Chinese companies that Saudi Aramco Overseas signed 2019 crude oil supply agreements with are the trading arms of state-owned CNPC, Sinochem, CNOOC, NORINCO and independent refiner Hengli Petrochemical, according to the newsletter. The total volume in the five agreements is 623,000 b/d. This is up 97,000 b/d from term volumes inked with these companies for 2018. SAO also signed a Memorandum of Understanding with CNOOC for an optional 100,000 b/d additional supply, bringing the total signed volume to 723,000 b/d. Platts Oilgram News brings fast-breaking global petroleum and natural gas news every day covering supply and demand trends, corporate news, government actions, exploration, technology, and much more. Click on the link below and we will set you up with a free trial. SAO has eight customers in China including state-run Sinopec and independent Zhejiang Petrochemical. Aramco attributed the supply increments in 2019 to its new customers -- independent refiners Zhejiang Petrochemical and Hengli Petrochemical, thanks to the company's marketing efforts that have focused on customer diversification, strategic relationships, and tapping regional demand. In September, Aramco agreed to supply 116,000 b/d of crude to the 400,000 b/d Zhejiang Petrochemical for 2019 on the sidelines of the 34th Annual Asia Pacific Petroleum Conference in Singapore. The giant used to focus on China's state-run oil firms with stable demand and credit, but is now targeting the larger independent refineries. "Large, integrated crude to chemical projects like ZPC [Zhejiang Petrochemical] and Hengli are the future of China's downstream industry and I'm excited Saudi Aramco will be a part of their success story," Al-Judaimi, vice president of Marketing, Sales and Supply Planning, said in the newsletter. During the China International Import Expo, Saudi Aramco increased its 2019 term contract with the 400,000 b/d Hengli Petrochemical by 30% from 2018, which is a large petrochemical conglomerate and the world's largest PTA maker expected to start trial runs in end 2018. Zhejiang Petrochemical is expected to start up in June 2019. Aramco will provide 40% of the plant's feedstock, according to the newsletter. Moreover, Saudi Aramco has agreed to take a 9% stake in Zhejiang Petrochemical, which will be its first investment in the country's independent refinery, Platts reported earlier. --Oceana Zhou, oceana.zhou@spglobal.com --Eric Yep, eric.yep@spglobal.com --Edited by Elizabeth Thang, newsdesk@spglobal.com
AramcoSaudi Aramco is likely to re-establish itself as China's largest supplier of crude oil after signing new contracts with five Chinese firms. Saudi Aramco forecasts the deals will boost exports to China by 1.67 million barrels per day (bpd) next year, enough to overtake Russia as the country's largest crude provider. The company, China's biggest supplier between 2006 and 2016, signed deals with state-owned firms CNPC, Sinochem, CNOOC and NORINCO, and the independent refiner Hengli Petrochemical. The agreements will see exports to the five rise to 623,000 bpd next year from 97,000 bpd.