China’s crude refining capacity nears government cap of 20 million b/d by 2025 – JLC
China is moving closer to the refining capacity ceiling fixed by the government "as a total of 740,000 b/d of new capacity is slated to come on stream in 2024-2025,” market intelligence provider JLC estimates.
PHOTO: Oil pumps with the Chinese flag in the background. Getty Images
China’s total refining capacity is expected to reach 19.92 million b/d by 2025, “very close to the capacity cap of 20 million b/d reaffirmed by the government,” if the country does not phase out any outdated capacity, JLC said.
Chinese refiners are expected to ramp up several projects across the country in the coming months to boost the country’s refining capacity.
Among others, the “highly anticipated” Chinese oil refiner Yulong Petrochemical's production plant with a capacity of 400,000 b/d is expected to commence operation in 2024, JLC said.
Additionally, China’s state-run refiner Sinopec is currently in the process of adding 220,000 b/d of new capacity to one of its subsidiary Zhenhai Refining and Chemical Company (ZRCC) in Ningbo. The project is expected to roll out in the first half of 2025. With a capacity of 540,000 b/d, ZRCC is currently the largest state-owned refineries, JLC said. This project is expected to push ZRCC’s processing capacity to 760,000 b/d, it further added.
China’s third-largest oil company CNOOC is also building a new crude oil distillation (CDU) unit in Ningbo, with a refining capacity of 120,000 b/d, JLC reported. Operation is expected to start in 2024-2025.
Moreover, China is expected to accelerate its total refining capacity in 2026 and beyond with more refineries coming online, including Saudi Arabian oil giant Aramco’s joint venture Huajin Aramco Petrochemical Company (HAPCO) facility that is expected to be fully operational by 2026, JLC added. HAPCO will process 300,000 b/d of crude, JLC reported.
Meanwhile, the country’s total refining capacity currently stands at 959 million mt/year or 19.18 million b/d.
To maintain the country’s refining capacity below the government's 20 million b/d cap, “China will have to speed up the process of phasing out obsolete refineries with capacity under 40,000 b/d,” JLC said. China will also have to wind down the refiners that “failed to meet emission standards, as per the government’s guidelines,” it further added.
By Aparupa Mazumder
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