Page 13 - AsianOil Week 40
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AsianOil SOUTHEAST ASIA AsianOil
and [Bureau of Internal Revenue] to give us a If Petron were to follow through on the
level playing field. Importers pay taxes when threatened refinery closure, it would have signif-
the products exit their compounds. In our icant implications for the country’s energy secu-
case, we pay taxes on raw materials, crude oil, rity. Royal Dutch Shell announced in August that
chemicals and advanced tax, etc upon arrival,” it intended to shutter its 110,000 bpd Tabangao
Ang said. He added: “If we will be asked to pay facility in Batangas Province permanently. The
taxes upon arrival, everybody else should pay super-major blamed the COVID-19-led slump
taxes upon arrival.” in GRMs for the decision.
EAST ASIA
China’s downstream
expansion steamrolls on
PROJECTS & CHINA is reportedly building four refineries refining capacity while its own demand growth
COMPANIES that will add 1.4mn barrels per day (bpd) of pro- is slowing,” Oxford Institute for Energy Studies’
cessing capacity, enough to cause some serious (OIES) director of China, Michal Meidan, told
concerns for the regional downstream. Bloomberg.
The new refinery projects are located in This trend is likely to set off a wave of refinery
places “like Zhejiang, Jiangsu and Yantai” and closures, Bloomberg quoted both Liu and Wood
will be geared toward producing petrochemicals Mackenzie analyst Sushant Gupta as saying.
and plastics, Bloomberg reported on October 7. “Our current estimate is there’s going to be
The new mega-refineries under construction about 1mn bpd refining capacity that is facing
in places like Zhejiang, Jiangsu and Yantai will closure threat,” Liu said, “out of which, 60% will
be geared toward turning crude oil directly into be in non-China territories.”
petrochemicals and plastics. That’s particularly Gupta, meanwhile, said that “refinery clo-
bad news for plants in Taiwan and South Korea sures will come in several forms. It does not
designed to cater to China’s petrochemical market, make sense now to operate a standalone refin-
said IHS Markit’s executive director for oil markets, ery, or a standalone petrochemicals plant for that
midstream and downstream, Harry Liu, who also matter.”
told the newswire that the facilities would end up The writing has long been on the wall for
producing more fuel than domestic demand could some of the region’s smaller facilities, with
absorb, triggering exports of nearly 1mn bpd. two refineries in Australia – Ampol’s Lytton
Moreover, increased petrochemical output refinery in Queensland and Viva Energy’s
would encroach on Taiwanese and South Korean Geelong refinery in Victoria – facing per-
plants’ Chinese market share, Liu said. manent closure. Surprisingly, Petron this
“China is increasingly in a position to take week also threatened to close the country’s
market share globally as it continues to expand last remaining facility.
Week 40 08•October•2020 www. NEWSBASE .com P13
