March 10, 2011 / 9:15 AM / 9 years ago

UPDATE 1-Libya tells waiting Chinese oil tanker to leave

BEIJING, March 10 (Reuters) - Libyan authorities have told a ship charted by Unipec, China’s biggest crude buyer, to leave the port of Es-Sider without its intended cargo of 2 million barrels of crude oil, a trading source said on Thursday.

Unipec, the trading arm of Asia’s top oil refiner Sinopec Corp , was told its cargo of crude had been cancelled and asked to remove its Very Large Crude Carrier (VLCC) from the port, the source said.

The ship, the “Gulf Sheba”, will instead go to Algeria to load Saharan Blend for April loading and Unipec will not buy any Libyan crude for April loading.

Trade sources previously said Unipec had declined an offer from Saudi Aramco for crude to replace lost Libyan supplies.

Demand from China and Northeast Asia for West and North African crude is falling because of the high premiums these supplies command over cargoes from the Gulf, so the impact from the turn down of Unipec’s cargo will be “limited,” said a trader with a northeast Asian refiner.

In this case, Unipec has probably opted for Algerian crude because the tanker was already in the Mediterranean Sea, he added.

On Wednesday, tanker operator Gulf Navigation told Reuters the Gulf Sheba was docked at the port, also known as Sidrah, where sailings were “almost business as usual”, but had not been able to load any crude oil.

Libyan rebel fighters said on Wednesday that government forces had hit an oil pipeline leading to Es Sider.

Unipec could opt to send the tanker to another Mediterranean port, such as in Algeria, if it failed to load crude in Libya, where supplies have been affected by unrest, he said.

Late last month China diverted a frigate from anti-piracy duties off Somalia to help with the evacuation of its 36,000 citizens living in the country.

The ship, the Xuzhou missile frigate, is “one of its most advanced navy ships”, Francois Godement, director of strategy at the Asia Centre of the European Council on Foreign Relations, said in a research note received by Reuters on Thursday.

Additional reporting by Alejandro Barbajosa in SINGAPORE; Editing by Ken Wills and Manash Goswami

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