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Downstream news update: Asia and the Middle East

Hydrocarbon Engineering,



The State Council, China’s cabinet, will grant crude oil import quotas to ‘qualified’ refineries which experts say is a step forward in trimming large state owned refiners’ import monopoly.

The central government may grant oil import rights to more refineries beyond the dominant companies, taking into account standards for environmental protection, security and energy consumption during the refining process.

In China, five State owned companies have crude import rights, including two energy giants, China National Petroleum Corp and China Petrochemical Corp.


Kothari Petrochemicals Ltd hopes to expand its reach in South east Asia through its overseas subsidiaries. The company’s subsidiary, Kothari Petrochemicals Pte Ltd, Singapore, floated in July, has now spawned a step down subsidiary in Hong Kong, Kothari Petrochemicals HK Ltd.

Last year, the company secured a contract to supply its product to British Petroleum’s lube manufacturing plants in Asia and, during the year, to supply Petermina, the Indonesia government owned oil company. It supplies to leading multinational oil companies in over 20 countries.

Also in India, NSEL has proposed to initiate default proceedings against Lotus refineries, saying that it owes Rs 252 crore to investors, a claim the company has disputed.


Russian Foreign Minister, Sergei Lavrov, has said that Russia and the European Union could enjoy closer energy ties but the EU’s gas market reforms remain a roadblock.

In an article recently published in the Journal of Common Market Studies annual review, Lavrov outlined that Moscow and Bruseels are capable of developing ‘energy cooperation, leading in the future to a single European energy complex’.

However, the implementation of the EU’s ‘Third Energy Package’, which seeks to ‘unbundle’ ownership of natural gas production and transmission lines such as those operated by Russia’s Gazprom, is hindering closer ties.

Lavrov insists that ‘the Third Energy Package has already created problems for practical cooperation. Certain EU countries are now less appealing to Russian businesses, and systemic risks are higher. In some cases, we see de facto expropriation of Russian companies’ assets.’

The Russian Foreign Minister additional criticised an ongoing EU antitrust investigation of Gazprom, which was launched last year.

In that action, the European Commission opened formal proceedings to probe whether Gazprom might be hindering the free flow of gas across EU member states and preventing diversification of its gas supply.

It also suspects Gazprom may have imposed unfair prices on its customers by linking the price of gas to oil prices.

Lavrov said Gazprom makes a ‘significant contribution to energy security on the European continent’ and contended that such price linking ‘has never been questioned and is used by other companies supplying natural gas to Europe’.

Middle East


The State Oil Company of Azerbaijan (SOCAR) is conducting reconstructive work on the Baku Oil Refinery.

Hamon Thermal Europe is to build a new cooling unit at the site.

SOCAR have commented that ‘due to the high demand for high octane gasoline we signed an agreement with UOP on an increase of capacity of catalytic cracking unit 55 up to 3 million t of output a year. A feasibility study is being drafted in this connection. Foster Wheeler has been already working to improve the performance of the refinery’s main facilities up to 7.5 million t’.


Libya’s largest refinery has loaded its first petroleum products tanker since unrest hit the oil labour sector approximately three weeks ago.

The tanker, Cape Benat, began loading kerosene early on Friday at the Ras Lanuf refinery. The ship was expected to head for Italy.

Pay strikes and other protests at Libya’s largest ports, as well as oilfields, have pushed crude oil output and exports to the lowest levels since the civil war that ousted Muammar Qaddafi in 2011.

Shipping sources have indicated the striking security guards continue to prevent crude loading at Ras Lanuf, however products loading from the refinery is separate.

Edited from various sources by Emma McAleavey.

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