CNOOC prepares to launch new Chinese refinery in June

China National Offshore Oil Company (CNOOC) is set to bring an expanded joint-venture refinery into operation around June, marking a further step in its refining and petrochemicals expansion, Reuters reported on March 4, citing industry sources.

The state-controlled producer is preparing to commission the upgraded complex on Daxie Island in Ningbo, where more than a dozen newly installed units have been added under a CNY20bn ($2.74bn) expansion project. The facility is expected to increase the company’s demand for imported crude, Reuters said.

Key additions to the site include a 120,000 barrel per day (bpd) crude distillation unit, a 3.2mn tonne per year (tpy) catalytic cracker, a 2mn tpy hydrocracker, a 2.4mn tpy continuous reformer and two polypropylene units with capacities of 450,000 tpy each, according to a recent CNOOC procurement document.

The expansion raises the refinery’s crude processing capacity by 50% to 240,000 bpd, following the decommissioning of a smaller unit, and increases output of feedstocks for plastics and synthetic fibres, according to Reuters.

With the Daxie upgrade, CNOOC’s overall crude processing capacity in China will reach approximately 1mn bpd, factoring in plants it controls and has invested in.

CNOOC’s largest refining subsidiary is in Huizhou, Guangdong province, where it operates a 440,000-bpd refinery integrated with a petrochemical complex developed in partnership with Shell. The petrochemicals complex currently produces 2.2mn tpy of ethylene and 6mn tpy of other chemical products. Plans are underway to expand the complex by 2028, including the addition of a third ethylene cracker with a capacity of 1.6mn tpy and a new facility to produce 320,000 tpy of specialty chemicals, such as polycarbonates and carbonate solvents.

CNOOC, the parent company of offshore oil and gas producer CNOOC Ltd, manages the group’s refining and petrochemical operations. The firm’s refining and chemicals division stated on its official WeChat account on March 4 that the Daxie plant was undergoing crude unit heating, a key step in pre-startup preparations.

Earlier this year, CNOOC was granted an import quota for 3mn tonnes of crude (60,000 bpd), which Reuters reported was allocated to the expanded Daxie refinery. The facility is 33% owned by private chemical group Union King Holdings.

Separately, CNOOC is developing an underground commercial oil storage facility at Daxie with a total capacity of 5mn cubic metres (31.5mn barrels), according to a company tender document issued last September. The storage site, to be completed in two phases, is scheduled for full operation by the end of 2027. The company operates a similar-sized storage base in Shandong province.