Australia’s dwindling heavy sweet crude oil production and fluctuations in Venezuela’s Merey crude exports could prompt China to source more heavy crude from Canada, with attractive price differentials for Cold Lake Blend further boosting Asian interest in Alberta’s landlocked oil. Three crude cargoes loading in November from Vancouver were bought by Chinese companies, with the first cargo for November 10 loading taken by China National Offshore Oil Corporation, or CNOOC, a shipping source with close knowledge of the matter said.
CNOOC had also chartered an Aframax tanker, the Nordtulip, to ship crude from Terasen Westridge Terminal in Vancouver to China that was loaded on October 13, at a lumpsum rate of $1.2 million, the shipping source said. Chinese traders indicated that CNOOC could have taken either heavy sour Cold Lake Blend or Western Canadian Select crude into its latest shopping basket, but a company official declined to comment on the heavy sour Canadian grade it has purchased. The latest round of Canadian crude purchases came on the heels of rapid decline in Australian heavy sweet crude output, coupled with a sharp slowdown in China’s imports of heavy crude from Venezuela.
“ChemChina typically led the independent sector’s heavy crude purchases from Australia but that’s a dying trend now [due to limited availability] … it’s no surprise to see China’s search for heavy crude oil stretching to Canada,” said a sweet crude trader based in Beijing.