* Buys 1 mln bbls Iranian South Pars condensate -trade
* Set to win 4 mln T condensate import quotas for 2013
* To start trial runs at petrochemical complex in Dec
* Eyes term supply
SINGAPORE/BEIJING, Nov 13 (Reuters) - Dragon Aromatics has
bought its first cargo of condensate from sanctions-hit Iran in
preparation for the start of trial runs at one of China's
biggest independent petrochemicals complexes, trade sources
The petrochemical producer, owned by Taiwan's Xianglu Group,
snapped up the cargo of super light crude at a deep discount, as
Iran struggles to find buyers amid tightening Western sanctions.
The cargo of one million barrels of South Pars condensate
was bought at a discount of about $8 a barrel to dated Brent
compared with a $4 discount for a comparable grade low sulphur
condensate (LSC) from Qatar, traders said.
That implies Dragon is benefitting about $4 million on the
cargo it bought from Chinese state-run oil trader Zhuhai
Zhenrong, for delivery on Nov. 8.
The United States and Europe have imposed tough sanctions on
Iran in a bid to choke off Tehran's oil revenues and halt a
controversial nuclear programme the West says is aimed at
building weapons, a claim Iran denies.
While the sanctions do not specifically ban sales of oil,
they target the financing and shipping insurance needed to buy
and transport the cargoes which makes purchases very difficult.
Dragon is expected to start trial operations in December in
the complex that includes a 4 million tonne-per-year (tpy), or
90,000 barrels-per-day (bpd) condensate splitter, sources close
to the project said.
The splitter is part of the company's 20 billion yuan ($3
billion) petrochemicals complex, located in Gulei port of
The group is set to win government permission to import
condensate, making it the only independent operator with such a
permit in China.
That allows it to buy the cargoes it wants so long as it
uses an agent, or one of the country's handful state-designated
traders, to clear them through customs, and pays a commission
for the service.
"We are currently in negotiations for long-term contracts
but we will rely on spot imports for the time being," said a
company source who declined to give further details.
The company is looking to buy further spot cargoes for
December, said the source, who declined to be identified because
of the sensitivity of the issue.
A senior trading manager with Dragon Aromatics declined to
comment on the origin of the cargo, but confirmed that the firm
was set to win quotas to import 4 million tonnes of condensate
for 2013 and to cover 500,000 tonnes of imports by end-2012.
Dragon Aromatics has been in talks with condensate sellers
to secure an annual supply. That will still have to be imported
through one of the agents, which include Chinaoil, Sinochem,
Zhuhai Zhenrong Corp and Unipec, the trading arm of top state
refiner Sinopec Corp.
"Unipec has existing term supply and they could divert or
set aside some barrels for Dragon," one trade source said, but
added that Dragon Aromatics preferred to work with Zhenrong.
Officials at Zhuhai Zhenrong Corp declined to comment.
Dragon Aromatics is also looking at condensate from Qatar
that can yield more heavy naphtha and vacuum gasoil as feedstock
for derivative units.
It will also need to import atmospheric residue,
straight-run fuel oil or vacuum gasoil (VGO) for a 3.17 million
tpy hydrocracker at the same site.
Dragon Aromatics is part of the Xianglu Dragon Group which
owns synthetic fibre plants in Fujian province. The new
condensate splitter is integrated with an 800,000 tonne-per-year
plant that produces paraxylene (px), a intermediate in making
(Additional reporting by Loh Bohan and Luke Pachymuthu; Editing
by Manash Goswami and Miral Fahmy)