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Pakistan’s falling fuel demand could hit upstream operators
PAKISTAN
THE coronavirus (COVID-19) pandemic is reportedly depressing Pakistan’s fuel demand to the point where the country’s upstream may have to trim its production of crude oil.
Pakistani financial daily quoted unnamed industry sources on March 23 as saying that oil marketing companies’ (OMCs) sales in March had started falling.
While official figures are not available yet, the daily quoted sources as saying that transporta- tion, power generation, aviation and industrial fuel demand was slowing in response to ongoing social distancing efforts and was likely to worsen as the government introduces more drastic measures.
Refiners, meanwhile, are likely to see their margins squeezed from the slowdown, one market source said. Operators are already under pressure, having to process crude inventories that have been severely devalued by the recent price crash. Attock Refinery Ltd (ARL), which has a current nameplate capacity of 53,400
barrels per day, said on March 19 that it would close its second 5,000 bpd crude distillation unit (CDU) owing to reduced OMC offtake volumes. The refiner, which said high-speed diesel (HSD) stockpiles had reached “critically high” levels and storage was quickly running out, processes locally produced crude oil. It warned that refin- ery run disruptions would, therefore, hurt the domestic upstream.
ARL CEO Adil Khattak informed the Paki- stani Petroleum Division last week to express his concerns about be able to keep the refinery run- ning if offtake volumes did not increase.
“As of [March 19], we are carrying 14,000 tonnes of HSD stocks with remaining ullage of hardly one day,” Khattak said. “We wish to inform you that OMCs’ failure to lift the product from ARL will ultimately lead to complete shut- down of our refinery, which will result in disrup- tion of the supply chain of E&P companies and associated gas supplies, leading to serious impli- cations for all concerned.™
RENEWABLES
China aims for massive 60GW solar panel factory
CHINA
CHINA’S GCL System Integration Technology (GCL-SI) is to spend CNY18bn ($2.5bn) of its own funds and loans to construct a 60GW capacity solar module factory in the city of Hefei in Anhui Province, the company said in a stock exchange filing.
The 60GW plant would be the largest single production site in the global solar industry, and would host wafer, cell, module and all compo- nent manufacturing facilities.
GCL-SI said that construction would take place in four phases, beginning in the first quar- ter of 2020.
The company said it aimed to invest CNY5bn ($700mn) per year to build 15GW of manu- facturing capacity each year. It would concen- trate on using 210mm x 210mm large-area monocrystalline wafers.
The company said the complex aimed to meet future demand for solar panels to drive down further the cost of manufacturing PV modules.
Indeed, the cost of new renewables has already fallen below that of coal in China, a recent report from Carbon Tracker found.
The report said that China had 982GW of coal power capacity at present, and 71% of this costs more to run than building new renewables.
Even the proposal comes at an uncertain time for solar in China. Annual additions fell to 30GW in 2019, down from 52GW in 2017 and 44GW in 2018.
The planned solar plant would be able to supply almost 51% of global solar installations, Bloomberg reported, and would increase GCL System’s own capacity from 7.2GW per year to over 67.2GW per year.
China is pushing ahead with developing all aspects of the solar power supply chain this year, Bloomberg noted. At least thirteen Chi- nese firms are intending to add at least 40GW of annual capacity for the production of ingots, wafers and cells by the end of 2020.
Meanwhile, Jingneng Power said recently it would invest CNY23bn ($3.3bn) in a hybrid 5GW wind and solar power generation project. The venture will also include hydrogen produc- tion and energy storage.™
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