China's state-owned Zhenhua Oil has booked to load two million barrels of Saudi crude in August, two sources familiar with the matter said on Wednesday, in a sign a new Chinese-Saudi Arabian joint venture refinery is getting set to start operations.
The crude will be supplied to the newly built 300,000-barrel-per-day Huajin Aramco Petrochemical Company (HAPCO) refinery in northeastern China's Liaoning province, the sources said.
HAPCO is a joint venture between Saudi Aramco and Chinese state-owned defence conglomerate Norinco Group and Panjin Xincheng Industrial Group.
HAPCO's start-up has been delayed to September or October because of disruptions to Middle East oil supply through the Strait of Hormuz, Reuters reported in June.
Aramco declined to comment, and Zhenhua Oil did not immediately respond to Reuters' request for comment.
Zhenhua, a subsidiary of Norinco, procures crude for the refinery, the sources said.
Aramco said in 2023 it would supply up to 210,000 bpd of crude to HAPCO.
Aramco has sold about 24 million barrels, or 774,194 bpd, of crude in total to Zhenhua and other Chinese refiners for August, trade sources said, double a record low of around 12 million barrels in July.
The world's top oil exporter has cut its August official selling price for crude to Asia by $11 per barrel from the previous month, the biggest drop in more than two decades.
The steep price reduction followed a sharp fall in oil prices after a US-Iran interim agreement eased concerns about Middle East supplies. Renewed attacks in the region since last week, however, have revived supply fears and again slowed shipping through the Strait of Hormuz.
Zhenhua last lifted Saudi term crude in August 2024, Reuters' records showed.
(Reporting by Siyi Liu in Singapore; Editing by Sonali Paul)
