March 12, 2010 1:52 am ET

PetroChina, along with its state-owned parent China National Petroleum Corp., has contracts to build and upgrade refineries in several countries in North America and Africa, enhancing its potential as a regional oil marketer.
PetroChina hasn' t kept its ambitions secret. Last year, China' s largest-listed oil company by capacity acquired a controlling stake in Singapore Petroleum Co., securing access to its well-established Asian marketing and distribution networks, and a minority stake in Nippon Oil Corp.' s Osaka refinery.
Its Asian trading teams have also been making aggressive pushes into Vietnam, Indonesia, the Philippines and India. In recent months, PetroChina has sold fuel to Bharat Petroleum Corp., Indian Oil Corp., Petrolimex, Petron Corp. and PT Pertamina.
" They are certainly increasing their trading operations and volume globally," said one Singapore-based trader.
A spokesman for PetroChina, which is listed in Hong Kong and Shanghai, said the company doesn' t comment on specific trading operations.
PetroChina has signed contracts to lift up to 5.4 million barrels of gasoil and up to 9.6 million barrels of jet fuel in 2010 from South Korean, Japanese and Taiwanese refiners, according to a trader familiar with the matter.
The cargoes will be loaded on to medium-range oil tankers, which can hold up to 300,000 barrels each.
Given China' s record output of both kerosene and diesel in recent months, the fuel lifted via term contracts will likely be used for overseas trading rather than for supply to China, several Singapore-based traders said.
In 2010, PetroChina will purchase four cargoes of 10-ppm-sulfur gasoil from Japan Energy Corp. and eight cargoes from GS Caltex at premiums of 55 cents a barrel and $1 a barrel to Singapore quotes, respectively.
PetroChina will also buy up to six 0.5%-sulfur gasoil cargoes from Hyundai Oilbank Corp. at a discount of about 65 cents a barrel to quotes.
For jet fuel supply, PetroChina will purchase 24 cargoes from GS Caltex and eight cargoes from Taiwan' s CPC Corp. at a discount of about 60 cents a barrel to quotes.
PetroChina' s 2010 term volumes come in stark contrast to 2009, when the company had just one contract to lift eight jet fuel cargoes from Taiwan' s Formosa Petrochemical Corp. at a discount of about $1 a barrel to quotes.
PetroChina has also been actively securing oil storage in Singapore--Asia' s largest trading hub--and in North America.
The company has access to about 220,000 cubic meters, or almost 1.4 million barrels, of onshore tanks, according to a person familiar with the matter. In contrast, China' s state-controlled Unipec and Sinopec aren' t known to have access to onshore storage in Singapore, the person added.
PetroChina leases about 100,000 cubic meters for gasoil storage at Universal Terminal on Jurong Island and 60,000 cubic meters of gasoline or gasoil storage at Royal Vopak NV' s Sebarok Terminal. The company also has access to 60,000 cubic meters of gasoline or gasoil storage at Singapore Petroleum' s Pulau Sebarok Terminal, the person said.
PetroChina has also been increasing its storage capacity offshore. In December, the company chartered a very large crude carrier, or VLCC, called the Athenian Success to store as much as 2.2 million barrels in the Mediterranean Sea, according to shipbrokers and traders in Singapore and London.
The newly built supertanker left a South Korean shipyard on Jan. 11, loaded a small parcel of gasoil from a regional port, and then arrived off Malta' s shores in late February, according to shipbrokers.
PetroChina time chartered the vessel for up to nine months at a freight rate of $36,000 a day, shipbrokers said. However, based on the ship' s draft, which can be used to measure the weight of cargo onboard, the VLCC is still half empty, shipbrokers say.