Page 13 - AsianOil Week 20 2022

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Chinese refinery throughput

down amid lockdowns

PERFORMANCE CHINESE refinery throughput was down are once again hitting its energy sector, as well as
11% year on year in April, the latest data from the country’s economy more broadly.
the National Bureau of Statistics (NBS) have Demand for refined products has fallen,
shown. with gasoline and aviation fuel reported to be
According to the NBS, China’s crude through- the worst hit. And China’s vehicle sales in April
put totalled 51.81mn tonnes in April, equivalent dropped by almost 48% y/y.
to 12.61mn barrels per day. This compares with State-owned refining giant Sinopec reduced
throughput of 13.8mn bpd in March 2022 and its utilisation rate to around 86% from 92.5%
14.09mn bpd in April 2022. earlier in the year, while independent refiners,
Over the first four months of the year, refinery concentrated in Shandong Province and known
throughput amounted to 13.58mn bpd, down as teapots, are reported to have been operating at
3.8% y/y. less than half their capacity in April.
This came as refiners scaled back operations Despite all of this, China was reported last
amid ongoing lockdowns in China as Beijing week to have imported more crude in April,
persisted with its efforts to eradicate the coro- according to Bloomberg calculations based on
navirus (COVID-19) in the country – a strat- General Administration of Customs (GAC)
egy that has looked increasingly futile since the data. This was attributed to increased seaborne
emergence of the omicron variant. supplies from Russia.
Indeed, the refinery throughput levels seen in The news service said China had imported
April were the lowest since March 2020 – when 10.51mn bpd in April, up 4% on March. It
the first wave of lockdowns was taking place in cited a Vortexa analyst as saying it was unclear
response to what had by that point become a whether these additional volumes were pur-
pandemic. Now, even as much of the rest of the chased before or after Russia invaded Ukraine
world eases restrictions, China’s latest lockdowns in late February.™

S-Oil suffers explosion at

South Korean refinery

PROJECTS & SOUTH Korea’s S-Oil experienced an explo- and a paraxylene (PX) unit, as a precautionary
COMPANIES sion at its Onsan refinery in the city of Ulsan on measure.
May 19. The incident led the company to sus- “The affected plant will be shut down until
pend operations at several processing units at the root cause is identified and preventive meas-
the refinery, in a move that could contribute to ures are put in place,” S-Oil’s CEO, Hussain
tightening gasoline supplies and rising refining Al-Qahtani, told a news conference. “In the
margins in Asia. This comes as Asian refiners’ meantime, we are exploring the best solutions to
margins are already near an all-time high of make sure this does not cause any interruption
almost $34 per barrel, according to Reuters. in domestic supply of fuel products by making
Firefighters, who were still working as of May full use of inventory and domestic or overseas
20 to extinguish the fire that followed the explo- network.”
sion at an alkylation unit, said one person had Citi analysts said they expected S-Oil’s gas-
been killed and nine others injured in the inci- oline output to be “severely impacted” in the
dent. S-Oil and the firefighters said they believed near term. In a note, the analysts suggested that
the fire was ignited in a compressor during the it could take up to two years to replace the fire-
start-up process after maintenance. hit unit, during which time they said S-Oil could
According to a regulatory filing, S-Oil sus- export very low sulphur fuel oil (VLSFO). It has
pended operations at the alkylation unit where also been suggested that the company, which is
the explosion took place. It also suspended oper- majority owned by Saudi Aramco, could buy
ations at nearby processing units, including a alkylate to maintain production.
residue fluidized catalytic cracking (RFCC) unit S-Oil is South Korea’s third-largest refiner.™

Week 20 20•May•2022 www. NEWSBASE .com P13