ROSNEFT Supplies Crude Oil to CEFC China Energy from Jan 2018

On January 19, ROSNEFT announced that it would supply ESPO, Urals and Sokol oil to CEFC China Energy. In September 2017, CEFC China Energy purchased 14.2% of the shares of ROSNEFT and signed a 5-year contract with ROSNEFT. According to the contract, ROSNEFT will supply crude oil to CEFC China Energy from January 2018, and the maximum supply volume will be 60.8 million mt in the next five years. Some market participants predicts that CEFC China Energy may become the biggest ESPO trader in China. According to SCI, the first cargo may arrive at the end of March or the beginning of April. At present, CEFC China Energy is active to communicate with Shandong independent refineries to build marketing channels for its imported ESPO. According to the shipping data, China’s imported ESPO was mainly from Kozmino, and main players of ESPO include Trafigura, Vitol, Lukoil, ChemChina, UNIPEC and so on. ChemChina purchases ESPO for its independent refineries, such as Zhenghe Group, Huaxing Petrochemical, Changyi Petrochemical and so on.