Beijing ‘importing Iran oil despite US sanctions’

The National Iranian Tanker Company discharged 958,000 tons of Iranian crude into China in July, according to data provider Refinitiv. (Reuters)
Updated 08 August 2019

Beijing ‘importing Iran oil despite US sanctions’

  • Trump officials estimate that 50-70 percent of Iranian exports are flowing to China

SINGAPORE: China imported Iranian crude oil in July for the second month since a US sanctions waiver ended, according to research from three data firms, with one estimate showing some oil entered tanks holding the country’s strategic reserves.

According to the firms, which track tanker movements, between 4.4 million and 11 million barrels of Iranian crude were discharged into China last month, or 142,000 to 360,000 barrels per day (bpd). The upper end of that range would mean July imports still added up to close to half of their year-earlier level despite sanctions.

The imports are continuing at a precarious moment in US-China relations: The flow is hampering US President Donald Trump’s efforts to choke off oil exports vital to Iran through sanctions, just as tensions rise in the festering US-China trade dispute that has cast a pall over the global economy.

Senior Trump administration officials estimate that 50-70 percent of Iran’s oil exports are flowing to China, while roughly 30 percent go to Syria. China is typically Iran’s largest oil customer and contests Washington’s sanctions. But June imports of around 210,000 bpd were the lowest in nearly a decade and 60 percent below their year-ago level, according to customs data, as some Chinese refiners, concerned about the sanctions, refrained from dealing with Iran.

The General Administration of Chinese Customs is scheduled to release details of July imports by origin in the last week of August.

Neither the National Development & Reform Commission, the state planner that oversees the country’s state oil reserves, nor the national customs bureau responded to Reuters’ requests for comment.

Similar to June imports, it is unclear how much of the July shipments has been sold to buyers or stored in bonded storage tanks and yet to clear customs. Some 20 million barrels of Iranian oil appeared stranded at the northeastern port of Dalian after being moved into bonded tanks since late last year.

While the customs department does not disclose details of port entries, oil analytics firms track where tankers arrive.

According to research by data provider Refinitiv, July saw five vessels operated by the National Iranian Tanker Company (NITC) discharge 958,000 tons of Iranian crude into Chinese port Jinzhou in the northeast, Huizhou in the south and Tianjin in the north.

NITC did not immediately respond to a request for comment.

Jinzhou, Tianjin and Huizhou are locations for refineries and commercial storage owned by Chinese state oil firms China Petrochemical Corp. (Sinopec Group) and China National Petroleum Company (CNPC). Some of the country’s tanks holding Strategic Petroleum Reserves (SPR) — kept by many countries as stockpiles for emergency situations — are also located in these cities.

Asked if it was among buyers of Iranian oil, Sinopec declined comment. CNPC did not respond to a request for comment.

In a report dated July 29, London-based energy data firm Kpler said inventories at the Jinzhou underground SPR rose to 6 million barrels from 3.2 million in mid-June “as a result of Iranian crude flows... The increase is fully the result of Iranian barrels discharged into the facility.”

The firm estimated 360,000 bpd of Iranian crude had been delivered to China last month.

Vortexa, another London-based energy market intelligence firm, pegged the July deliveries into China at 4.4 million barrels and identified similar port destinations.


Saudi energy giant to invest $3bn in Bangladesh’s power sector

Updated 22 October 2019

Saudi energy giant to invest $3bn in Bangladesh’s power sector

  • Experts say deal will usher in more economic and development opportunities for the country

DHAKA: Saudi Arabia’s energy giant, ACWA power, will set up an LNG-based 3,600 MW plant in Bangladesh after an agreement was signed in Dhaka on Thursday.

The MoU was signed by ACWA Chairman Mohammed Abunayyan and officials from the Bangladesh Power Development Board (BPDB), officials told Arab News on Monday.

According to the agreement, ACWA will invest $3 billion in Bangladesh’s energy development sector, of which $2.5 billion will be used to build the power plant while the rest will be spent on an LNG terminal to facilitate fuel supply to the plant. Under the deal, ACWA will also set up a 2 MW solar power plant.

In recent months, both countries have engaged in a series of discussions for investment opportunities in Bangladesh’s industry and energy sectors. 

During the Saudi-Bangladesh investment cooperation meeting in March this year, Dhaka proposed a $35 billion investment plan to a high-powered Saudi delegation led by Majed bin Abdullah Al-Qasabi, the Saudi commerce and investment minister, and Mohammed bin Mezyed Al-Tuwaijri, the Saudi economy and planning minister.

However, officials in Dhaka said that this was the first investment deal to be signed between the two countries.

“We have just inked the MoU for building the LNG-based power plant. Now, ACWA will conduct a feasibility study regarding the location of the plant, which is expected to be completed in the next six months,” Khaled Mahmood, chairman of BPDB, told Arab News.

He added that there are several locations in Moheshkhali, Chottogram and the Mongla port area for the proposed power plant.

“We need to find a suitable location where the drift of the river will be suitable for establishing the LNG plant and we need to also consider the suitability of establishing the transmission lines,” Mahmood said.

“It will be either a JV (Joint Venture) or an IPP (Independent Power Producer) mode of investment, which is yet to be determined. But, we are expecting that in next year the investment will start coming here,” Mahmood said.

BPDB expects to complete the set-up process of the power plant within 36 to 42 months.

“We are in close contact with ACWA and focusing on the successful completion of the project within the shortest possible time,” he said.

Abunayyan said that he was optimistic about the new investment deal.

“Bangladesh has been a model for the Muslim world in economic progress. This is our beginning, and our journey and our relationship will last for a long time,” Abunayyan told a gathering after the MoU signing ceremony.

Economists and experts in Bangladesh also welcomed the ACWA investment in the energy development sector.

“This sort of huge and long-term capital investment will create a lot of employment opportunities. On the other hand, it will facilitate other trade negotiations with the Middle Eastern countries, too,” Dr. Nazneen Ahmed, senior research fellow at the Bangladesh Institute of Development Studies (BIDS), told Arab News.

She added that Bangladesh needs to weigh the pros and cons before finalizing such contracts so that the country can earn the “maximum benefits” from the investment.

“It will also expedite other big investments in Bangladesh from different countries,” she said.

Another energy economist, Dr. Asadujjaman, said that Bangladesh needs to exercise caution while conducting the feasibility study for such a huge investment.

“We need to address the environmental aspects, opportunity costs and other economic perspectives while working with this type of big investment. Considering the present situation, the country also needs to focus on producing more solar energy,” Dr. Asadujjaman told Arab News.