Chinese trader Sinochem expects to raise its 2013 term contract purchase volume for crude oil to roughly 600,000 b/d, up from 500,000 b/d this year, its head of trading said Thursday.

Zhong Ren, Sinochem's assistant president, said on the sidelines of the China International Oil and Gas Trade Conference in Shanghai that the increase is mainly due to the expected commissioning of its wholly owned greenfield Quanzhou refinery in Guangdong province in the third quarter.

"Talks for the crude volumes have been completed," he said.

Sinochem in August received final approval from top economic planner, the National Development and Reform Commission, for the 12 million mt/year (241,000 b/d) refinery.

This will be its first wholly owned refinery and is slated to produce high quality jet/kerosene, gasoline, gasoil and aromatics. It will be located in the Meizhouwan petrochemical base in Fujian and will help strengthen Sinochem's trading and oil products business in China. Zhong said Sinochem's total trade in products and crude last year amounted to 60 million mt.

Zhong said 80% of the crude for the Quanzhou refinery will come from Kuwait and discussions on term volumes have taken place. "Kuwaiti crude will be the baseload feedstock. Since the refinery will only start up in the second half of the year, we'll only require significantly more crude from 2014," he said.

"The remaining 20% of supply will come from elsewhere. I believe crude from Saudia Arabia and Iraq are the most suitable in quality to [match that of] Kuwaiti crude," Zhong said.

"We are not in talks with Saudi Arabia to supply the refinery but we have existing term supplies from them," he added, saying that Sinochem has agreements in place with governments in most Middle East exporting countries, which would make it easy to get incremental volumes.