ESAI: China likely to become net exporter of high-sulfur diesel

By OGJ editors

HOUSTON, Feb. 15 -- China appears likely to become a net exporter of high-sulfur diesel, or gas oil, starting in February and lasting through March, said a report from Energy Security Analysis Inc. (ESAI), Boston.

High-sulfur diesel is China's primary transport fuel and increasingly is being used in electric power generators. Imports surged to 5-year highs in December. During the surge, gas oil imports rose to nearly 125,000 b/d compared with 20,000 b/d during the third quarter, ESAI said.

But now, Chinese imports have slowed dramatically as higher refinery runs largely have met China's domestic demand, said Rick Mueller, ESAI oil manager. He expects Chinese gas oil imports will remain far below their December level through March.

China Petroleum & Chemical Corp. (Sinopec) plans to shift to 500 ppm sulfur in its diesel production by Apr. 1, which "will undoubtedly disrupt gas oil production and raise the call on imports," Mueller said.

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