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ENEOS ( JXHGF ), SK Energy, GS Caltex, Hengyi Petchem buy their

first

cargoes

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Cold Lake crude preferred by most Asian refiners over AWB

By Florence Tan

SINGAPORE, July 15 (Reuters) - Asia's crude oil imports

from Canada's newly expanded Trans Mountain pipeline will rise

in September as major refiners in Japan and South Korea and a

refinery in Brunei have bought their first cargoes alongside

China, multiple trade sources said.

The purchases come after exports commenced from the expanded

TMX pipeline in May which will triple the flow of crude from

landlocked Alberta to Canada's Pacific coast to 890,000 barrels

per day (bpd). Owned by the Canadian government, the pipeline

gives Canadian producers more access to U.S. West Coast and

Asian markets while providing Asian refiners an opportunity to

diversify their imports.

Chevron ( CVX ) will split a Cold Lake crude cargo between

its South Korean joint venture refiner GS Caltex and Japan's top

refiner ENEOS ( JXHGF ), traders said. ENEOS ( JXHGF ) bought 250,000

barrels while GS Caltex takes the remaining 300,000 barrels,

they added.

South Korea's top refiner SK Energy, a unit of SK Innovation

, bought a cargo from Unipec while Hengyi

Petrochemical, a refinery operator in Brunei, also

purchased a cargo from PetroChina, traders said.

The cargoes, of 550,000 barrels each, to be delivered in

September were sold at discounts of between $5 and $6 a barrel

to ICE Brent, they added.

Meanwhile, Chinese private refiner Rongsheng Petrochemical

has also purchased another two TMX cargoes from

ConocoPhillips ( COP ) and Vitol after buying two cargoes via a tender,

traders said.

Rongsheng's four Canadian Access Western Blend (AWB) crude

cargoes will be delivered to Zhoushan, in eastern China, in

September, they added.

These companies typically do not comment on commercial

deals.

Cold Lake and AWB are heavy sour crude with API gravity of

21-22 degrees and contain 3.5-4% sulphur.

Most North Asia refiners prefer Cold Lake as AWB is more

acidic, which could cause corrosion in plants, traders said.

"Canada's TMX crude attracts interest from Asian buyers who

are keen to secure cheap supplies of heavy grades but do not

have access to U.S.-sanctioned Venezuelan crude," said Muyu Xu,

a senior crude oil analyst at analytics firm Kpler.

"It will still take some time for refiners to experiment

with and test TMX crude as the first few cargoes have just

arrived."

TMX crude exports, expected at about 350,000 to 400,000 bpd,

will mostly compete with heavy grades from Latin America and the

Middle East, Xu said.

Cold Lake is about $10 per barrel cheaper than Iraq's Basra

Heavy for deliveries to China, she added.

TMX crude exports in June were at 343,000 bpd, with 187,000

bpd to China, 60,000 bpd to India and the remainder to U.S. West

Coast refineries, Kpler data showed.

Cargoes to China are expected to be discharged later this

month at PetroChina's Qinzhou and Jieyang refineries

as well as Sinopec's Maoming plant in southern

China.

India has yet to purchase more Canadian crude due to

abundant Russian supplies, traders said, after Reliance

Industries bought its first TMX cargo from Shell

for July delivery.

Some traders are also watching out for any impact from the

wildfire season on Canadian oil production.