Economy
PetroChina steps up global trading drive
(China Daily)
Updated: 2010-01-01 09:48
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NEW YORK: Saudi Arabia will quit a long-held lease for 5 million barrels of Caribbean oil storage near the key US market and PetroChina is poised to move in, industry sources said, a potential major shift in global oil trade dynamics.
 A worker checking valves at a PetroChina oil storage tank in Sichuan province. [Zhong Min] |
Coming just weeks after Saudi Oil Minister Ali al-Naimi revealed the world's top oil exporter accepted an offer for free storage in Japan, the news underscored the growing importance of China and Asia versus the United States, where the government says oil demand has already peaked and supply competition from nearby Brazil and Canada is expanding.
It also highlights the increasingly global reach of the Chinese oil company, which could use the facilities as a staging point for a growing slate of South American oil deals or as trading leverage in the US market, which still effectively sets the global price of oil.
Three sources familiar with Saudi operations at the terminal told Reuters state oil company Saudi Aramco ended its arrangement to lease at the 13 million-barrel Statia Terminals on the island of St. Eustatius. The 5 million-barrel lease, regularly renewed by an Aramco subsidiary since 1995, formally ended yesterday, one of the sources said.
"Aramco dropped out of storage recently, having discussed it for quite some time," a source familiar with Saudi Aramco's positions in the Caribbean said.
"They have more important emerging markets to look at."
A source said PetroChina was negotiating to take the space, although it wasn't clear whether it would mainly store crude oil or residual fuel. A second source familiar with the terminal said that a large, state-run enterprise was taking over the Aramco lease, but declined to identify the party.
"We have been running some fuel oil tanks there but want to expand," the Beijing-based PetroChina source said.
San Antonio-based NuStar Energy LP, which owns and operates the St. Eustatius terminal, declined to comment. Saudi Aramco did not respond to requests for comment. PetroChina officials in the US also declined to comment.
NuStar's terminal on St. Eustatius, more than 1,770 km southeast of Miami, is among the largest storage and shipping operations in the Caribbean.
PetroChina, which has had a US subsidiary in New Jersey since at least 2003, has accelerated its expansion recently, opening a trading office in Houston last August and expanding to 10 traders, company sources told Reuters.
"It does appear PetroChina is becoming a bigger force in the oil market. Adding storage capacity close to the US market could be another step in that growth process," said Tom Bentz, senior commodity analyst at BNP Paribas Commodity Futures Inc in New York.
Reuters
