China will increase its refinery runs by 4.6% to 634.3 million tonnes (12.74 million bpd) in 2019, state-owned China National Petroleum Corp. (CNPC) has forecast.
Of that total, Sinopec will process 250 million tonnes (5 million bpd), CNPC will account for 165 million tonnes (3.3 million bpd) and China National Offshore Oil Corp. (CNOOC) will process 31.5 million tonnes (630,000 bpd), with independent refineries – mostly located in eastern China’s Shandong Province – responsible for the remainder.
In its latest report, CNPC said the country’s refinery runs stood at 606 million tonnes (12.17 million bpd) in 2018, up from 567.8 million tonnes (11.4 million bpd) in 2017.
Gasoline throughput is projected to expand to 146.5 million tonnes this year, from 140 million tonnes in 2018. Jet fuel production will climb to 51.2 million tonnes from last year’s 47.6 million tonnes.
Diesel production is anticipated to rise to 181.1 million tonnes from 177.2 million tonnes in 2018, while lubricants output will reach 24.2 million tonnes from 23.4 million tonnes last year.
The country’s total crude distillation capacity will increase by 3.8% on the year to 863.4 million tonnes (17.34 million bpd) in 2019, further extending the sector’s over capacity issues.
Industry sources have said operations at major refineries in the country’s east, north-east and south will be optimised, while the government will strive to shut down smaller and inefficient units, mostly owned and operated by independent and private businesses.
Shandong teapot refineries will face further overhaul as smaller units merge in an attempt to avoid being shut down by the central government. While the sector has already witnessed a number of mergers and acquisitions, the government is still looking for suitable outfits to shutter.
Sources have said a few new refining units will come on stream this year. The downstream will likely see further capacity increases over the next a few years as greenfield joint venture refineries begin to come online, sources added.