Page 10 - AsianOil Week 24 2021

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China sets yet another

refinery run record

The downstream sector has set a new crude processing record amid an expansion
drive that will see China crowned as the world’s biggest refiner this year

COMMENTARY NEWS this week that China has set another The country’s demand for plastics and petro-
refinery processing record brings the country’s chemicals, however, is showing no sign of slow-
rampant capacity expansion back into focus, ing and domestic consumption continues to
WHAT: while also raising questions about the down- grow. China is not alone in seeing this demand
Chinese refineries stream sector’s future amid predictions of an trend, with other emerging economies in the
processed 14.31mn bpd imminent fuel demand peak. Asia-Pacific witnessing strong demand for pet-
of crude in May. Chinese refineries processed 60.50mn tonnes rochemicals as their economies expand.
(14.31mn barrels per day) of crude in May, a China is well on the path to becoming the
WHY: 4.4% increase year on year, according to data the world’s largest refiner, with the International
An economic rebound National Bureau of Statistics (NBS) published Energy Agency (IEA) estimating that it will take
coupled with an ever on June 16. This was the highest level since the the crown this year.
more vibrant private country processed 58.35mn tonnes (14.26mn CNPC’s research arm has estimated that
sector are the main bpd) of oil in November 2020. Refiners pro- the country’s refining capacity will reach
drivers. cessed 292.74mn tonnes of oil in the first five 900mn tonnes (18mn bpd) this year and rise
months of the year process, up 12% on the year. to 980mn tonnes (19.6mn bpd) by 2025, leav-
WHAT NEXT: While the country’s rapid economic recovery ing the domestic market with a refining over-
As China exports more from the coronavirus (COVID-19) pandemic hang of at least 160mn tonnes (3.2mn bpd) by
fuel, private players explains some of the surge in refining runs, it that point.
may gain access to the does not tell the whole story. The country is also Capacity is being swelled by private refiner-
international market. setting refining records on the back of an ongo- ies that have benefitted from favourable govern-
ing expansion in downstream capacity. ment policies in recent years, included reforms in
the middle of the last decade that granted them
Added capacity access to crude imports – a far more profitable
The country’s refinery operators, both state and pri- feedstock than the straight-run fuel oil (SRFO)
vate, are adding processing capacity that is geared they had been forced to import from Russia.
more towards petrochemicals than transport fuels. While this has come at a cost of the closure
Both state-owned Sinopec and China of smaller facilities, the rise of the country’s first
National Petroleum Corp. (CNPC), the coun- privately owned mega refineries is testament to
try’s largest refinery operators, have predicted the fact that the government’s strategy of creating
that domestic fuel demand will peak by 2025. a more robust private sector has worked.

P10 www. NEWSBASE .com Week 24 17•June•2021