Reuters reported that China’s Sinopec Corporation is retooling an idled crude distillation unit at its Tianjin refinery into a condensate splitter to process Iran’s South Pars condensate.

An industry official said that the revamp was in line with Sinopec’s latest deal with National Iranian Oil Corporation for its first term deal of Iranian condensate, a super light crude ideal for making ethylene as the top Asian refiner expands its petrochemical business.

Sinopec’s plant in the northern port city of Tianjin which started a year ago with 1 million tonne per year ethylene plant will turn 50,000 barrels per day crude unit into a splitter able to process 1 million tonnes per year of Iranian condensate or roughly 23,500 barrels per day.

The official with direct knowledge of the situation said that the revamp work should be completed around March and April. The new facility should be ready to process its first South Pars condensate cargo in April. The work was carried out on short notice on orders from top management. Shifting to Iranian condensate will definitely improve the margins of the ethylene unit.

The source said that Sinopec agreed to take 24 million barrels of South Pars condensate for 2011 from NIOC at a discount of about USD 5 per barrel to the average of Oman and Dubai crude, a price deemed very attractive by several Chinese oil traders.

The pact was part of the bigger annual crude supply pacts China and Iran sealed earlier this year that rank China the world’s largest buyer of Iranian crude. Sinopec officials were not immediately available for comment. Sinopec brought on line in 2010 big ethylene facilities in both Tianjin and Ningbo on the east coast, part of the country’s building boom to reduce reliance on petrochemicals imports.

(Sourced from Reuters)